In the earlier sections of this work no special difficulty was experienced in giving the essential traits of the economic thought of each period. But on the threshold of this last book we naturally feel some trepidation. The newer theories can scarcely be said to have fallen into their true perspective, and their full import is not clear to us contemporaries. Here, if anywhere, we shall run the risk of being arbitrary in our choice. It seems to us, however, that the economic thought of the end of the nineteenth and the beginning of the twentieth centuries reveals at least four dominant tendencies.
1. In the first place there is a quite unexpected revival of theoretical studies. Pure economic theory, which had been deliberately neglected by the Historical school, by the State and Christian Socialists, was in 1875 again taken up by a group of eminent writers who flourished in England, France, and Austria. With the aid of conceptions that had not been in current use since the days of Condillac, coupled with the application of the mathematical method, which had not been attempted since the time of Cournot, they have succeeded in substituting an attractive and ingenious theory of prices for the somewhat halting hypothesis put forth by the Classical theorists. The success of the method in other fields of economic inquiry is every day enhancing its reputation. A number of writers both in America and Europe (excepting France, perhaps) are engaged upon this task, following in the wake of Walras, of Jevons, and of Menger. Diagrams, algebraical formulÆ, and subtle reasoning again characterise the works of economists. Pure economics, so much decried since the days of Ricardo, has once more justified its claim to a position of honour, and despite keen opposition it is attracting attention everywhere. From the point of view of economic science this is the most notable fact of recent years.
2. Parallel with this has gone on a profound change in socialism. We have already shown in the course of the preceding book the transformations undergone by Marx’s ideas at the hands of even his own followers. The decline is equally evident everywhere else. All pretension to set up a proletarian in opposition to a bourgeois economics has been renounced. “It is necessary,” says M. Sorel somewhere, “to abandon every thought of transforming socialism into a science.” In fact, French syndicalists, English Fabians, and German revisionists have rallied with more or less good grace to the scientific ideas of Pareto, Marshall, or BÖhm-Bawerk. But the real reason for this change of attitude is the strong desire to devote themselves with greater vigour to the social and political demands of socialism. The general strike, the creation of syndicats, the establishment of co-operative societies, and the problems of municipal socialism are attracting more and more attention, whereas the theory of surplus value is falling into the background. Even more striking still, as we shall see, is the attempt made by some of them, especially the advocates of land nationalisation—to reconcile Liberalism and socialism upon the basis of a doctrine that is Classical par excellence—the theory of rent.
3. This is not the only change that socialism has undergone. The ideal of collectivism which long prevailed among the working classes was that of a centralised sovereign authority, and the active part taken by the collectivist party in the legislative and even in the administrative work of some countries still further encouraged this belief. But the old revolutionary spirit, always individualistic to the core, was still alive, especially in the Latin countries, and it began to show signs of impatience at the turn things had taken. And so we witness among the working classes a revival of Liberalism, harsh and violent in its expression perhaps, and doubtless very different from the founders’. Smith and Bastiat would have some difficulty in recognising it, and with a view to avoiding confusion with the older doctrine it has assumed the name libertaire, but is generally known by the no less authentic title of “anarchism.” This tendency towards extreme individualism and anarchy, of which there is unmistakable evidence even in the annals of the International, has gained the ascendancy over the working classes, leaving a deep mark upon the recent syndicalist movement in France and Italy. At the same time there has also appeared among writers of the bourgeois class a kind of philosophical and moral anarchism which affords further proof of the revival of individualism.
4. Owing to these transformations in the theories of individualism and socialism, that other doctrine which in an earlier book went by the name of State Socialism has also undergone a change. In France, at any rate, it has reappeared under the name of Solidarism, which attempts a justification of State intervention by basing it on new foundations and confining it within just limits. It thus really represents an effort at synthesising individualism and socialism.
These are the main currents which we have attempted to describe in the following chapters. By describing them as recent doctrines our aim was not to emphasise the date of their appearance—which indeed is often in the distant past—but to show that they are merely a fresh effort to rejuvenate the older theories of which they are the latest manifestation. We might perhaps have borrowed a term from another domain and referred to them as modernist doctrines did it not seem rash to group under a perfectly definite term conceptions that are so very diverse in character and which have nothing more than a chronological order binding them together.
CHAPTER I: THE HEDONISTS
I: THE PSEUDO-RENAISSANCE OF THE CLASSICAL SCHOOL
If we are to give this new doctrine its true setting we must return for a moment to our study of the Historical school. The criticism of that school, as we have already seen, was directed chiefly against the method of the Classical writers. The faith which their predecessors had placed in the permanence and universality of natural law was scornfully rejected, and the possibility of ever founding a science upon a chain of general propositions emphatically denied. Political economy, so it was decreed, was henceforth to be concerned merely with the classification of observed facts.
It would not have been difficult to foretell that the swing of the pendulum—in accordance with that strange rhythm which is such a feature of the history of thought—would at the opportune moment cause a reversion to the abstract method. That is exactly what happened. Just at the moment when Historical study seemed to be triumphantly forging ahead—that is, about the years 1872-74—several eminent economists in Austria, England, Switzerland, and America suddenly and simultaneously made their appearance with an emphatic demand that political economy should be regarded as an independent science. They brought forward the claims of what they called pure economics. Naturally enough there ensued the keenest controversy between the champions of the two schools, notably between Professors Schmoller and Karl Menger.
The new school had one distinctive characteristic. In its search for a basis upon which to build the new theory it hit upon the general principle that man always seeks pleasure and avoids pain, getting as much of the former with as slight a dilution of the latter as he possibly can.[1103] A fact of such great importance and one that was not confined to the field of economic activities, but seemed present everywhere throughout nature in the guise of the principle of least resistance, could scarcely have escaped the notice of the Classical theorists. They had referred to it simply as “personal interest,” but to-day we speak of it as Hedonism, from the Greek ?d??? (pleasure or agreeableness). Hence the name Hedonists, by which we have chosen to designate these two schools.
The elimination of all motives affecting human action except one does not imply any desire on the part of these writers to deny the existence of others. They simply lay claim to the right of abstraction, without which no exact science could ever be constituted. In other words, they demand the right of eliminating from the field of research every element other than the one which they wish to examine. The study of the other motives belongs to the province of other social sciences. The homo oeconomicus of the Classicals which has been the object of so much derision has been replaced on its pedestal. But it has in the meantime undergone such a process of simplification that it is scarcely better than a mere abstraction. Men are again to be treated as forces and represented by curves or figures as in treatises on mechanics. The object of the study is to determine the interaction of men among themselves, and their reaction upon the external world.
We shall also find that the new schools arrive at an almost identical conclusion with the old, namely, that absolutely free competition alone gives the maximum of satisfaction to everybody. Allowing for the differences in their respective points of view, to which we shall refer later on, what is this but simply a revival of the great Classical tradition?
Little wonder, then, that we find a good deal of sympathy shown for the old Classical school. Indeed, it is throughout regarded with almost filial piety.[1104]
This does not mean that the Classical doctrine is treated as being wholly beyond reproach, although it does mean that the new school could scarcely accuse it of being in error, seeing that it comes to similar conclusions itself. But what it does lay to the charge of the older writers is a failure to prove what they assumed to be true and a tendency to be satisfied with a process of reasoning which too often meant wandering round in a hopeless circle. Especially was this the case with their study of causal relations, forgetting that as often as not cause was effect and effect cause. The attempt to determine which is cause and which effect is clearly futile, and the science must rest content with the discovery of uniformities either of sequence or of coexistence.
This applies especially to the three great laws which form the framework of economic science, namely, the law of demand and supply, the law of cost of production, and the law of distribution, none of which is independent of the others. Let us review them briefly.
The law stating that “price varies directly with demand and inversely with supply” possessed just that degree of mathematical precision necessary to attract the attention of the new writers. In fact, it just served for the passage from the old to the new economics. But no sooner was the crossing effected than the bridge was destroyed. Little difficulty was experienced in pointing out that this so-called law which had been considered to be one of the axioms of political economy, the quid inconcussum upon which had been raised all the superstructure of economic theory, was an excellent example of that circular reasoning of which we have just spoken. There was a considerable flutter among the economists of the mid-nineteenth century when they found themselves forced to recognise this. However true it may be that price is determined by demand and supply, it is equally true that demand and supply are each in their turn determined by the price, so that it is impossible to tell which is cause or which is effect. Stuart Mill had already noted this contradiction, and had attempted correction in the way already described (p. 359). But he was ignorant of the fact that Cournot had completely demolished the formula by setting up another in its place, namely, that “demand is a function of price.”[1105] The substitution of that formula marks the inauguration of the Hedonistic calculus. Demand is now shown to be connected with price by a kind of see-saw movement, falling when prices rise and rising when prices fall. Supply is equally a function of price, but it operates in the opposite fashion, moving pari passu with it—rising as it rises and falling as it falls. Thus price, demand, and supply are like three sections of one mechanism, none of which can move in isolation, and the problem is to determine the law of their interdependence.
This does not by any means imply that there is no longer any place in economics for the law of demand and supply. It has merely been given a new significance, and the usual way of expressing it nowadays is by means of a supply and demand curve, which simply involves translating Cournot’s dictum into figures.
The same is true of the law stating that cost of production determines value. There is the same petitio principii here. It is easy enough to see, on the contrary, that the entrepreneur regulates his cost of production according to price. The Classical school had realised this as far as one of the elements in the cost of production was concerned, for it was quite emphatic in its teaching that price determined rent, but that rent did not determine price. It is just as true of the other elements. In other words, the second law is just as fallible as the first. It is obviously imperative that the vain quest for causal relations should be abandoned and that economists should be content with the statement that between cost of production and price there exists a kind of equilibrating action in virtue not of any mysterious solidarity which subsists between them, but because the mere absence of equilibrium due either to a diminution or an increase in the quantity of products immediately sets up forces which tend to bring it back to a position of equilibrium. This interdependent relation, which is extremely important in itself and upon which the Hedonists lay great store, is simply one example taken from among many where the value of one thing is just a function of another.
Similar criticism applies to the law of distribution, to the Classical doctrine of wages, interest, and rent. The way the Classical writers treated of these questions was extraordinarily naÏve. Take the question of rent. You just subtract from the total value of the product wages, interest, and profit, and you are left with rent. Or take the question of profit. In this case you will have to subtract rent, if there is any, then wages and interest, the other component elements, and what remains is profit. BÖhm-Bawerk wittily remarks that the saying that wages are determined by the product of labour apparently only amounts to this—that what remains (if any) after the other co-operators have had their share is wages. Each co-partner in turn becomes a residual claimant and the amount of the residuum is determined by assuming that we already know the share of the other claimants![1106]
The new school refuses any longer to pay honour to this ancient trinity. It is impossible to treat each factor separately because of the intimate connection between them, and their productive work, as the Hedonists point out, must necessarily be complementary. In any case, before we can determine the relative shares of each we must be certain that our unknown x is not reckoned among the known. This naturally leads them on to the realm of mathematical formulÆ and equations.
All the Hedonists, however, do not employ mathematics. The Psychological school, especially the Austrian section of it, seems to think that little can be gained by the employment of mathematical formulÆ. Some of the Mathematical economists, on the other hand, are equally convinced of the futility of psychology, especially of the famous principle of final utility, which is the corner-stone of the Austrian theory.[1107]
For the sake of clearness it may be better to take the two branches—the Psychological and the Mathematical—separately.
II: THE PSYCHOLOGICAL SCHOOL
The feature of the Psychological school is its fidelity to the doctrine of final utility, whatever that may mean.[1108] The older economists had got hold of a similar notion when they spoke of value in use, but instead of preserving the idea they dismissed it with a name, and it was left to the Psychological school to revive it in its present glorified form.
It must not be imagined that the term is employed in the usual popular sense of something beneficial. All that it connotes is ability to satisfy some human want, be that want reasonable, ridiculous, or reprobatory. Bread, diamonds, and opium are all equally useful in this sense.[1109]
Nor must we fall into the opposite error of thinking of it as the utility of things in general. Rather is it the utility of a particular unit of some specific commodity relative to the demand of some individual for that commodity, whether the individual in question be producer or consumer. It is not a question of bread in general, but of the number of loaves. To speak of the utility of bread in general is absurd, and, moreover, there is no means of measuring it. What is interesting to me is the amount of bread which I want. This simple change in the general point of view has effectively got rid of all the ambiguities under which the Classical school laboured.[1110]
1. The first problem that suggests itself in this connection is this: Why is the idea of value inseparable from that of scarcity? Simply because the utility of each unit depends upon the intensity of the immediate need that requires satisfaction, and this intensity itself depends upon the quantity already possessed, for it is a law of physiology as well as of psychology that every need is limited by nature and grows less as the amount possessed increases, until a point zero is reached. This point is called the point of satiety, and beyond it the degree of utility becomes negative and desire is transformed into repulsion.[1111] Hence the first condition of utility is limitation of supply.
So long as people held to the idea of utility in general it was impossible to discover any necessary connection between utility and scarcity. It was easy enough to see that an explanation that was not based upon one or other of these two ideas was bound to be unsatisfactory, but nobody knew why. As soon as the connection between the two was realised, however, it became evident that utility must be regarded as a function of the quantity possessed, and that this degree of utility constitutes what we call value.
2. Just as the notion of final utility solved one of the most difficult problems in economics, namely, why water, for example, has less value than diamonds, it also helped to clear up another mystery that had perplexed many economists from the Physiocrats downward, namely, how exchange, which by definition implies the equivalence of the objects exchanged, can result in a gain for both parties. Here at last is the enigma solved. In an act of exchange attention must be focused not upon the total but upon the final utility. The equality in the case of both parties lies in the balance between the last portion that is acquired and the last portion that is given up.
Imagine two Congoese merchants, the one, A, having a heap of salt, and the other, B, a heap of rice, which they are anxious to exchange. As yet the rate of exchange is undetermined, but let them begin. A takes a handful of salt and passes it on to B, who does the same with the rice, and so the process goes on. A casts his eye upon the two heaps as they begin mounting up, and as the heap of rice keeps growing the utility of each new handful that is added keeps diminishing, because he will soon have enough to supply all his wants. It is otherwise with the salt, each successive handful assuming an increasing utility. Now, seeing that the utility of the one keeps increasing, while that of the other decreases, there must come a time when they will both be equal. At that point A will stop. The rate of exchange will be determined, and the prices fixed by the relative measures of the two heaps. At that moment the heap of rice acquired will not have for A a much greater utility than has the heap of salt with which he has parted.
But A is not the only individual concerned, and it is not at all probable that B will feel inclined to stop at the same moment as A; and if he had made up his mind to stop before A had been satisfied with the quantity of rice given him no exchange would have been possible. We must suppose, then, that each party to the exchange must be ready to go to some point beyond the limit which the other has fixed in petto. This point can only be arrived at by bargaining.[1112]
3. Another question that requires answering is this: How is it that there is only one price for goods of the same quality in the same market? Once it is clearly grasped that the utility spoken of is the utility of each separate unit for each separate individual it will be realised that there must be as many different utilities as there are units, for each of them satisfies a different need. But if this is the case, why does a person who is famishing not pay a much higher price for a loaf than a wealthy person who has very little need for it? or, why do I not pay more when I am hungry than when I am not? The reason is that it would be absurd to imagine that goods which are nearly identical and even interchangeable should have different exchange values on the same market and especially for the same person. This law of indifference,[1113] as it is called, is derived from another law to which the Psychological school rightly attaches great importance, and which constitutes one of its most precious contributions to the study of economics, namely, the law of substitution. This law implies that whenever one commodity can be exchanged for another for the purpose of satisfying the same need, the commodity replaced cannot be much more valuable than the commodity replacing it.[1114]
For what is substitution but mutual exchange? And exchange implies equality, so that if there is a series of interchangeable goods none of them can be of greater value than any of the rest.
Consequently, if an individual has at his disposal 100 glasses of water, which is easily available everywhere except in the Sahara, perhaps, no one of these glasses, not even that one for which he would be willing to give its weight in gold were he very thirsty and that the only glassful available, will have a greater value than has the hundredth, which is worth exactly nothing. The hundredth is always there ready to be substituted for any of the others.
But the best way of getting a clear idea of final utility is not to consider the value of the object A, but of the object B, which can replace it. It becomes evident, then, that if I am about to lose some object, A, which I value a good deal but which can be perfectly replaced by another object, B, that object A cannot be much more valuable than B; and if I had the further choice of replacing it by C, C being less valuable than B, then A itself cannot be much more valuable than C.[1115]
We arrive, then, at this conclusion: The value of wealth of every kind is determined by the value of its least useful portion—that is, by the least satisfaction which any one portion of it can give.
Hitherto we have been concerned with the notion of final utility as applied to the problems of value and exchange, but has it the same effect when applied to problems of production, distribution, or consumption? The Hedonists have no doubt as to the answer, for what are production, distribution, and consumption but modifications of exchange?
Take production, for example. How is it that under a system of free competition the value of the product is regulated by its cost of production? It is because a competitive rÉgime is by every definition a rÉgime where at any moment one product may be exchanged for another of a similar character, the similarity in this case being simply the result of a certain transformation of the raw material. The law of substitution is operative here, and the reason why cost of production regulates value is that the cost of production at any moment represents the last interchangeable value.
The same is true of consumption, as we can see if we only watch the way in which each of us distributes his purchases and arranges his expenditure. There is evident everywhere an attempt to get the best out of life—to get all the enjoyment which our different incomes may be made to yield; here spending more on house-room and less on food, there curtailing on amusement and extending on charity, until a rough kind of equilibrium is reached where the final utility of the last exchanged objects—or, if another phrase be preferred, the intensities of the last satisfied needs—are equal. If the coin spent in purchasing the last cigar does not yield the same pleasure as the same coin yields when spent on a newspaper, the newspaper will in future probably take the place of the cigar. Consumption seems really to be a kind of exchange, with conscience for mart and desires as buyers and sellers.[1116]
Nor is the realm of distribution even beyond the reach of the utility theory. Its application to the problems of interest, wages, and rent is largely the work of American economists, especially of J.B. Clark. It is quite impossible for us to give an exposition of the subtle analyses in which the quarterly reviews of the American universities take such a delight, and which undoubtedly afford a very welcome relaxation in an atmosphere so charged with pragmatism and realism. But we must just glance at the theory of wages. Wages, like other values, must be determined by final utility. But the final utility of what, and for whom? The final utility of the services which the worker renders to the entrepreneur. Following other factors of production, the final productivity of the workers will determine their wages. That is, their final utility is fixed by the value produced by the marginal worker—no matter how worthless he may be—who only just pays the entrepreneur. The value produced by this almost supernumerary worker not only fixes the maximum which the employer can afford to give him, but also the wages given to all the other workers who can take his place, i.e. who are employed upon the same kind of work as his, although they may produce much more than he does; just as in the case of the 100 glasses of water the least valuable glassful determines the value of all the rest.[1117]
Thus is the productivity theory of wages at once confirmed and corrected. But this time it is the productivity of the least productive worker, of the individual who barely keeps himself. No wonder the theory has lost its optimistic note. Somehow or other it does not seem very different from the old “brazen law.”
The rate of interest follows a similar line—the marginal item of capital fixing the rate. It is even more true of capital, which is more completely standardised, with the result that the principle of substitution works much more easily.[1118]
Rent is treated at greater length in the next chapter.
Gradually we begin to realise how the observation of certain facts apparently of a worthless or insignificant character, such as the substitution of chicory for coffee or the complete uselessness of a single glove, enabled the Psychological school to propound a number of general theories such as the law of substitution and the doctrine of complementary goods which shed new light upon a great number of economic questions. There is something very impressive about this deductive process that irresistibly reminds one of the genie of the Thousand and One Nights, who grew gradually bigger and bigger until he finally reached the heavens. But then the genie was nothing but flame. It still remains to be seen whether this is equally true of the Hedonistic theories.
III: THE MATHEMATICAL SCHOOL[1119]
The Mathematical school is distinguished for its attachment to the study of exchange, from which it proposes to deduce the whole of political economy. Its method is based upon the fact that every exchange may be represented as an equation, A = B, which expresses the relation between the quantities exchanged. Thus the first step plunges us into mathematics.
However true this may be, the application of the method must necessarily be very limited if it is always to be confined to exchange. It is, however, a mistake to suppose that this is really the case, and one of the most ingenious and fruitful contributions made by the new school was to show how this circle could be gradually enlarged so as to include the whole of economic science.
Distribution, production, and even consumption are included within its ambit. Let us take distribution first and inquire what wages and rent are. In a word, what are revenues? A revenue is the price of certain services rendered by labour, capital, and land, the agents of production, and paid for by the entrepreneur as the result of an act of exchange.
And what is production? It is but the exchanging of one utility for another—a certain quantity of raw materials and of labour for a certain quantity of consumable goods. Even nature might be compared to a merchant exchanging products for labour, and Xenophon must have had a glimpse of this ingenious theory when he declared that “the gods sell us goods in return for our toil.” The analogy might be pushed still farther, and every act of exchange may be considered an act of production. Pantaleoni puts it elegantly when he says that “a partner to an exchange is very much like a field that needs tilling or a mine that requires exploiting.”[1120]
And what are capitalisation, investment, and loan but the exchange of present goods and immediate joys for the goods and enjoyments of the future?
It was a comparison instituted between the lending of money and an ordinary act of exchange that led BÖhm-Bawerk to formulate his celebrated theory of interest. BÖhm-Bawerk, however, is a representative of the Austrian rather than the Mathematical school.
Even consumption—that is, the employment of wealth—implies incessant exchanging, for if our resources are necessarily limited that must involve a choice between the object which we buy and that which with a sigh we are obliged to renounce. To give up an evening at the theatre in order to buy a book is to exchange one pleasure for another, and the law of exchange covers this case just as well as any other.[1121] It is the same everywhere. To pay taxes is to give up a portion of our goods in order to obtain security for all the rest. The rearing of children involves the sacrifice of one’s own well-being and comfort in exchange for the joys of family life and the good opinion of our fellow-men.
It is not impossible, then, to discover among economic facts certain relations which are expressible in algebraical formulÆ or even reducible to figures. The art of the Mathematical economist consists in the discovery of such relations and in putting them forth in the form of equations.
For example, we know that when the price of a commodity goes up the demand for it falls off. Here are two quantities, one of which is a function of the other.[1122] Let us see how the law of demand in its amended form would express this.
If along a horizontal line A B we take a number of fixed points equidistant from one another to represent prices, e.g. 1, 2, 3, 4, 5 … 10, and from each of these points we draw a vertical line to represent the quantity demanded at that price, and then join the summits of these vertical lines, which are known as the ordinates, we have a curve starting at a fairly high point—representing the lowest prices—and gradually descending as the prices rise until it becomes merged with the horizontal, at which point the demand becomes nil.[1123]
What is very interesting is that the curve is different for different products. In some cases the curve is gentle, in others abrupt, according as the demand, as Marshall puts it, has a greater or lesser degree of elasticity. Every commodity has, so to speak, its own characteristic curve, enabling us, at least theoretically, to recognise that product among a hundred.[1124]
Geometrical figures can always take the place of equations, for every equation can be expressed in the form of a curve. Geometrical representation makes a quicker appeal to the eye, and it is extremely useful where people are not conversant with the calculus which is frequently employed by Cournot and other Mathematical writers. But it is hardly as fruitful, for a geometrical figure can only trace the relation between two quantities, one of which is fixed and the other is variable, or between three at most, when two would be variable. Even in this case recourse would be necessary to projections, and the figures in that case would not be very clear. In the case of algebraical formulÆ, on the other hand, we can have as much variation as we like provided we have as many equations as there are variables.
We would naturally expect the supply curve to be just the inverse of the demand curve, rising with a rising price and descending with a falling one, so that by the time the price is zero supply is nil, whereas the demand is infinite.[1125]
But it is not quite correct to regard it as merely the inverse of the demand curve. A supply curve is really a much more complicated affair, because supply itself depends upon cost of production, and there are some kinds of production—agriculture, for example—where the cost of production increases much more rapidly than the quantity produced. In industry, on the other hand, the cost of production decreases as the quantity produced increases.
Mathematical political economy, not content with seeking relations of mutual dependence between isolated facts, claims to be able to embrace the whole field within its comprehensive formulÆ. Everything seems to be in a state of equilibrium, and any attempt to upset it is immediately corrected by a tendency to re-establish it.[1126] To determine the conditions of equilibrium is the one object of pure economics.
The most remarkable attempt at systematisation of this kind was made by Professor Walras, who endeavoured to bring every aspect of the economic world within his formula, a task almost as formidable as that attempted by Laplace in his MÉcanique cÉleste.[1127]
Let us imagine the whole of society included within one single room, say the London Stock Exchange, which is full of the tumult of those who have come to buy and sell, and who keep shouting their prices. In the centre, occupying the place usually taken up by the market, sits the entrepreneur, a merchant or manufacturer or an agriculturist, as the case may be, who performs a double function.
On the one hand he buys from producers, whether rural or urban, landlords, capitalists, or workers, what Walras calls their “productive services,” that is, the fertility of their lands, the productivity of their capital or their labour force, and by paying them the price fixed by the laws of exchange he determines the revenue of each; to the proprietor he pays a rent, to the capitalist interest, to the workman wages. But how is that price determined? Just as at the Exchange all values whatsoever are determined by the law of demand and supply, so the entrepreneur demands so many services at such and such a price and the capitalist or workman offers him so many at that price, and the price will rise or fall until the quantity of services offered is equal to the quantity demanded.
The entrepreneur on his side disposes of the manufactured goods fashioned in his factory or the agricultural products grown on his farm to those very same persons, who have merely changed their clothes and become consumers. As a matter of fact the proprietors, capitalists, and workers who formerly figured as the vendors of services now reappear as the buyers of goods. And who else did we expect the buyers to be? Who else could they be?
And in this market the prices of products are determined in just the same fashion as we have outlined above.
All at once, however, a newer and a grander aspect of the equilibrium comes to view. Is it not quite evident that the total value of the productive services on the one hand and the total value of the products on the other must be mathematically equal? The entrepreneur cannot possibly receive in payment for the goods which he has sold to the consumers more than he gave to the same persons, who were just now producers, in return for their services. For where could they possibly get more money? It is a closed circuit, the quantity that comes out through one outlet re-enters through another.
With the important difference that it keeps much closer to facts, the explanation bears a striking resemblance to Quesnay’s Tableau Économique.[1128]
We have two markets in juxtaposition,[1129] the one for services and the other for products, and in each of them prices are determined by the same laws, which are three in number:
(a) On the same market there can be only one price for the same class of goods.
(b) This price must be such that the quantity offered and the quantity demanded shall exactly coincide.
(c) The price must be such as will give maximum satisfaction to the maximum number of buyers and sellers.
All these laws are mathematical in character and involve problems of equilibrium.
In some such way would the new school reduce the science of economics to a sort of mechanism of exchange, basing its justification upon the contention that the Hedonistic principle of obtaining the maximum of satisfaction at the minimum discomfort is a purely mechanical principle, which in other connections is known as the principle of least resistance or the law of conservation of energy. Every individual is regarded simply as the slave of self-interest, just as the billiard-ball is of the cue. It is the delight of every economist as of every good billiard-player to study the complicated figures which result from the collision of the balls with one another or with the cushion.[1130]
Another problem of equilibrium is to discover the exact proportion in which the different elements combine in production. Jevons compares production to the infernal mixture which was boiled in their cauldron by the witches in Macbeth. But the ingredients are not mixed haphazard, and Pareto thinks that they conform to a law analogous to the law known in chemistry as the law of definite proportions, which determines that molecules shall combine in certain proportions only. The combination of the productive factors is perhaps not quite so rigidly fixed as is the proportion of hydrogen and oxygen which goes to form water. Similar results, for example, may be obtained by employing more hand labour and less capital, or more capital and less hand labour. But there must be some certain proportion which will yield a maximum utility, and this maximum is obtainable in precisely the same way as in other cases of equilibrium—that is, by varying the “doses” of capital and labour until the final utility in the case both of capital and labour becomes equal. Generally speaking, this is the law that puts a limit to the indefinite expansion of industry, for whenever one element runs short, be it land or capital, labour or managing ability or markets, all the others are directly affected adversely and the undertaking as a whole becomes more difficult and less effective. Pareto rightly enough attaches the greatest importance to this law, and we have only to remember that it is the direct antithesis of the famous law of accumulation of capital to realise its full significance.
There are several other cases of interdependence to which the new school has drawn attention, as, for example, that of certain complementary goods whose values cannot vary independently. What is the use of one glove or one stocking without another, of a motor-car without petrol, of a table service without glasses? Not only is this true of consumption goods; it also applies to production goods. The value of coke is necessarily connected with the value of gas, for you cannot produce the one without the other, and this applies to all by-products. The possibility of utilising a by-product always lowers the price of the main commodity.
IV: CRITICISM OF THE HEDONISTIC DOCTRINES
The triumph of the new doctrines has been by no means universal. England, Italy, and Germany, and even the United States, where one would least expect enthusiasm for abstract speculation, have supplied many disciples, and several professorial chairs and learned reviews have been placed at their disposal. But up to the present France seems altogether closed to them. Not only was Walras, the doyen of the new school, forced to leave France to find in foreign lands a more congenial environment for the promulgation of his ideas, but until recently it would have been quite impossible to mention a single book or a single course of lectures given either in a university or anywhere else in which these doctrines were taught or even criticised.[1131]
We might have understood this antipathy more easily if France, like Germany, had already been annexed by the Historical school. There would have been some truth in a theory of incompatibility of tempers under circumstances of that kind. But the great majority of French economists were still faithful to the Liberal tradition, and one might naturally have expected a hearty welcome for a school that is essentially Neo-Classical and pretends nothing more than to give a fuller demonstration of the theories already taught by the old masters.[1132]
The mere fact, however, that they presumed to draw fresh lessons or to deduce new principles from those already formulated by the older writers appeared an unwarranted interference with doctrines that had hitherto seemed good enough for everyone. Criticism of that kind, of course, is not worth serious attention.
An easier line of criticism, and one very frequently adopted, is to maintain that the wants and desires of mankind are incapable of measurement and that mathematical causations can never be reconciled with the doctrine of free will. But such claims as these were never put forward by the Mathematical school. On the contrary, it has always recognised that every man is free to follow his own bent—trahit sua quemque voluptas—merely inquiring how man is to act if he is to obtain the maximum satisfaction out of the means at his disposal and to overcome the obstacles that stand in his way. Neither has it ever ventured to say that such and such a man is forced to sell corn or to buy it, but simply that if he does buy or sell it will be with a determination to make the best of the bargain, and that such being the case the buying or selling will take place in such and such a fashion. It further claims that the action of a number of individuals under similar circumstances is equally calculable. So is the movement of the balls on the billiard-table, but that does not interfere with the liberty of the players.[1133]
Nor do they pretend to be able to measure our desires. What they do—and it is not so absurd after all, because we are all doing it—is to express in pounds, shillings, and pence the value we put upon the acquisition or loss of an object that satisfies our desire. Moreover, the Mathematical school does not make much use of numbers, but confines itself to algebraical notation and geometrical figures—that is, to the consideration of abstract quantities. To write down a problem in the form of a mathematical equation is to show that the problem can be solved and to give the conditions under which solution is alone possible. Beyond this the economist never goes. He never tries to fix the price of corn, whatever it may be; he leaves that to the speculators.[1134]
From the other side—that is, from the historians, interventionists, solidarists, socialists—comes criticism which is quite as bitter and not a whit easier to justify. The Hedonistic doctrine appears to them simply as a fresh attempt to restore the optimistic teaching of the Manchester school, with its individualism and egoism, its free competition and general harmony, its insidious justification of interest, rent, and starvation wages—in the name of some imaginary entity which they call marginal utility. In short, it looks just like another proof of the thesis that the present economic order is the best possible—a proof that is all the less welcome seeing that it claims to be scientific and mathematically infallible.
This sort of criticism is nothing less than caricature. It would be futile to deny that the new school has undertaken the task of carrying on the work of the Classical writers, but what possible harm can there be in that? The royal road of science often turns out to be nothing better than a very narrow path—but it does lead somewhere. There would be no progress in economic science or in any other if every generation were to throw overboard all the work done by its predecessors. What the Hedonistic school has tried to do is to distinguish between the good and the bad work of the Classical writers and to retain the one while rejecting the other.
The main object of the equilibrium and final utility theories is not to justify the present economic rÉgime, but merely to explain it,[1135] which is quite a different matter. But it does happen in this case that the explanation justifies the conclusion that under the conditions of a free market the greatest good of the greatest number would naturally be secured. The term “good,” however, is used in a purely Hedonistic and not in the ethical sense. No attention is paid to the pre-existing conditions of the exchange, and none is bestowed upon its possible consequences. The old-time bargain between Esau and Jacob, when the former sold his birthright for a mere mess of pottage, gave the maximum of satisfaction to both, even to Esau, of whom it is related that he was at the point of death, and to whom accordingly the pottage must have been of infinite value. Even if Jacob had offered him a bottle of absinthe instead the result would have been equally satisfactory from a Hedonistic standpoint. The theory takes as little account of hygiene as it does of morals.
The Hedonist, by way of amendment, might suggest that Esau would have made a better bargain if there had been, not one, but several Jacobs offering the pottage, which helps to explain why they are so partial to competition and so strongly opposed to monopoly.[1136] No Hedonist would deny that Esau was exploited by Jacob; but, on the other hand, they would point out that there is no necessity to imagine that society is made up only of Esaus and Jacobs.[1137]
The same thing applies to BÖhm-Bawerk’s celebrated theory of interest. Indeed, BÖhm-Bawerk quite definitely states that he merely wants to discover some explanation of interest, but does not anticipate that he will be able to justify it, and in that spirit he condemns the ethical justifications that were attempted some centuries back. His object is to show that interest is neither due to the productivity of capital nor to the differential advantages enjoyed by its possessor. Neither is it a tax levied upon the exploited borrower: it is simply a time-payment. In other words, it represents the difference between the value of a present good and the same good on some future occasion. It is just the result of exchanging a present good for a future one. A hundred francs a year hence are not equal in value to a hundred francs here and now. To make them equal we must either add something by way of interest to the future item or take away something by way of discount from the present one.[1138]
Turning to the theory of wages, according to which the wages of each class of producers is supposed to be determined by the productivity of the marginal worker in that class, we are struck by the fact that it is only a little less pessimistic than the old “brazen law.” What it really implies is that the marginal worker—the worker whom the entrepreneur is only just induced to employ—consumes all that he produces.
The Hedonistic school, in short, has no theory of distribution, neither does it seem very anxious to have one. It speaks, not of co-sharers, but of productive services, whose relative contributions it is interested to discover. But it is one thing to know exactly what fraction of the work is due to a certain unit of capital or a given individual workman, and quite another to know whether workers or capitalists are being unfairly treated.
The best proof that the Hedonists are not mere advocates of laissez-faire is the general attitude of the leaders. It is true that the Austrian school has always shown itself quite indifferent to the social or working-class question,[1139] as it is sometimes called, but it certainly has a perfect right to confine itself to pure economics if it wishes. The other leaders of the school, however, have clearly shown that the method followed need involve no such approval or acquiescence. Not to mention Stanley Jevons, who in his book Social Reform makes a very strong case for intervention, we have also Professor Walras, who stands in the front rank of agrarian socialists. Leaving aside merely utilitarian considerations, he points out that in the interest of justice, which, as he has been careful to emphasise, involves quite a different point of view, he wants to establish a rÉgime of absolutely free competition. But how is this to be accomplished? Merely by means of laissez-faire, as the old Liberal school had thought? Not at all. It can only be done through the abolition of monopoly of every kind, and land monopoly, which is the foundation of every other, must go first. The reform advocated in his Économie sociale consists of two items, land nationalisation and the abolition of all taxation. The two items are intimately connected because the rents now become the possession of the State will take the place of the taxes, and the object of both is the same, namely, the extension of free competition by securing to every citizen the full produce of his work. Under existing conditions the producer is doubly taxed—in the first place by the landowner and then by the State.[1140] Moreover, when we remember that the point of equilibrium in Walras’s system occurs just where the selling price exactly coincides with the cost of production—in other words, where profit is reduced to zero—we begin to realise how far it is from anything in the nature of an apology for the present condition of things.
Vilfredo Pareto, another representative of this school, although ultra-individualistic in his opinions and extremely hostile to interventionism or solidarity, takes good care not to connect his personal opinion with the Hedonistic doctrines. As a matter of fact he thinks that, theoretically at least, the maximum of well-being might be equally attainable under a collectivist rÉgime, although he does not think that collectivism is yet possible. But this opinion is founded upon “ethical and other considerations which are quite outside the scope of economics.”[1141]
M. Pantaleoni, who soars higher still into the realm of pure, transcendental science, ventures to declare that the substitution of purely altruistic motives for merely selfish ones would involve about as much change in the calculation as would the substitution throughout of a plus for a minus sign in an algebraical equation. All extremes meet. Complete disinterestedness and absolute egoism would necessarily work out very much the same. Devotion to duty would replace the clamour for rights; sacrifices would be exchanged instead of utilities. But the laws determining their exchange would still be the same. The Hedonists are not so much concerned with the morality of such laws as with the productive capacity of a given economic state, just as in the case of a piece of machinery the engineer’s sole concern is to gauge the output of that machine.
But the most serious criticism passed upon the work of the school is that at the end of the reckoning nothing has been discovered that was not already known, to which the Hedonists reply that they have at least succeeded in making certain what was only tentative before. The discovery of truth appears to be an intermittent process, and the first vague presentiment is often as useful as the so-called scientific discovery. Astronomy, which is the most perfect of the sciences, has progressed just in this way. The older economists felt fully convinced that the rÉgime of free competition was best, but they gave no reason for the faith that was in them and no demonstration of the conditions under which the doctrine was true. Such a demonstration the Mathematical economists claim to have given by showing that a rÉgime of free competition is the only one where a maximum of satisfaction is available at a minimum of sacrifice for both parties. The same consideration applies to the law of demand and supply, the law of indifference, cost of production, wages, interest, rent, etc. To have given an irrefutable demonstration of theories that were formerly little better than vague intuitions[1142] or amorphous hypotheses is certainly something. We may laugh as much as we like at the homo oeconomicus, who is by this time little better than a skeleton, but it is the skeleton that has helped the science to stand upright and make progress. It has helped forward the process from the invertebrate to the vertebrate.
But admitting that all these doctrines have been definitely proved, as the Hedonists claim they have, is the science going to profit as much as they thought by it? Somebody has remarked that mathematics is a mere mill that grinds whatever is brought to it. The important question is, What is the corn like? In this case it consists of a mass of abstractions—a number of individuals actuated by the same selfish motives, alike in what they desire to get and are willing to give,[1143] the assumed ubiquity of capital and labour, facility for substitution, etc. It is possible enough that the flour coming from the mill may not prove very nutritious. When ground out the result would at any rate be as unlike reality as the new society outlined by Fourier, the Saint-Simonians, or the anarchists, and its realisation quite as improbable, unless we presuppose an equally miraculous revolution. The Hedonists frankly recognise this, and in this respect they show themselves superior to the Classical economists, who when they talk of free competition believe that it actually exists.[1144]
But however sceptical they are about the possibility of ever realising all this, they are somewhat emphatic about the virtues of the new method, and they are not exempt, perhaps, from a certain measure of dogmatic pride which irresistibly reminds one of the Utopian socialists. Could we not, for example, imagine Fourier writing in this strain: “What has already been accomplished is as nothing compared with what may be discovered” (by the application of the mathematical method);[1145] or “The new theories concerning cost of production have the same fundamental importance in political economy that the substitution of the Copernican for the Ptolemaic system has in astronomy”?[1146] We have already called attention to the comparison of Walras’s system with Newton’s Principia—all of which rather savours of enthusiasm outrunning judgment.
While recognising the very real services which the Mathematical and Austrian schools have rendered to the science, and admitting that they mark an era in the history of economics which can never be forgotten, we cannot do better than conclude with the advice of an economist who is himself an authority both in the Mathematical and Classical schools, and who is therefore well qualified to judge: “The most useful applications of mathematics to economics are those which are short and simple and which employ few symbols; and which aim at throwing a bright light on some small part of the great economic movement rather than at representing its endless complexities.”[1147]
CHAPTER II: THE THEORY OF RENT AND ITS APPLICATIONS
The revival of interest in Classical theories, of which mention was made in the last chapter, cannot be passed over without a special reference to the theory of rent. The theory of rent has always held a prominent place in economic science, especially during the earlier years of the nineteenth century, and the recent developments it has undergone are significant equally from a theoretical as from a practical standpoint.
Theoretically it has been shown that the concept rent, which for a long time was supposed to be indissolubly bound up with a particular economic phenomenon, namely, the revenue of landed proprietors, is capable of several applications and extensions, some of which might throw considerable light into more than one obscure corner of the economic world. Particularly does it seem applicable to a kind of revenue of which we hardly heard mention until recently—that is, the profits of the entrepreneur as distinct from the interest of the capitalist.
Practically also it is very important. Rent is “unearned increment” par excellence. In other words, it is a revenue for which the receiver has ostensibly done nothing. One can well imagine what fruitful ground for socialistic theories this must be! And, as a matter of fact, all systems of land nationalisation or of socialisation of rent—and they are by no means few in number—trace descent from the old Ricardian theory.
What we propose to do in this chapter is to examine the doctrine of rent in its twofold aspect, inquiring in the first place what developments it has recently undergone as a scientific theory, and, secondly, how it is proposed to apply this theory with a view to reforming society. The chief aim in view is, of course, to glean some knowledge of recent theories, but to do this we shall often find ourselves obliged to follow the stream backward towards its source in Mill or Ricardo, for in many cases it is the only way of appreciating the development of ideas.
I: THE THEORETICAL EXTENSION OF THE CONCEPT RENT
In a former chapter we were led to investigate the utterly futile attempts made both by Carey and Bastiat to undermine the Ricardian theory of rent. Open to criticism the theory certainly is, but in their anxiety to do away with it altogether these critics were led to deny that the land had any value at all.
But this denial has been refuted in no equivocal fashion by the emergence of what is perhaps the most striking phenomenon in nineteenth-century history, namely, the fabulous prices paid for land in the neighbourhood of large cities. The last century was pre-eminently the century of big towns. No other epoch in history can point to such growth of urban centres. England, America, Germany, and to a lesser degree France, have all had a share in this development. One result of this rapid agglomeration of population in restricted areas has been a wonderful growth of rents, or unearned increment. A quarter of an acre of land in the city of Chicago which was bought in 1830 for $20, at a time when the population was only fifty, and which in 1836 was sold for $25,000, was valued at $1,250,000 at the time of the International Exhibition in 1894. It has been calculated that the increase in ground-rents in London between 1870 and 1895 is represented by no less a sum than £7,000,000. Hyde Park, bought by the City of London in 1652 for £17,000, is to-day valued at about £8,000,000. M. d’Avenel states that in Paris a piece of land belonging to the HÔtel Dieu which was valued at 6 fr. 40 c. a square metre in 1775 is worth 1000 fr. to-day,[1148] and M. Leroy-Beaulieu mentions a piece of land in the neighbourhood of the Arc de Triomphe which between 1881 and 1904, i.e. in twenty-three years, has doubled its value and is now selling at 800 fr. a metre as compared with 400 fr. formerly.[1149] We have merely quoted a few isolated examples, but they may be regarded as typical.
Carey and Bastiat have not made many converts, evidently. The majority of economists have either accepted Ricardo’s theory or, having been induced to examine his position thoroughly, have been led to develop it, but none of them has denied the reality of the income derived from land. Hence the very curious twofold evolution which the theory presents.
On the one hand there has been discovered a whole series of differential revenues analogous to the rent of land, which, according to the expression of a great contemporary economist, “is not a thing by itself, but the leading species of a large genus.”[1150] On the other hand (and this second line of development is perhaps more curious than the first), while Ricardo considered that the rent of land was an economic anomaly resulting from special circumstances, such as the unequal fertility of the land or the law of diminishing returns, modern theorists regard it simply as the normal result of the regular operation of the laws of value. The rent of land and similar phenomena seem to fit in with the general theory of prices, and the theory of rent so laboriously constructed by the Classical school falls into the background as being comparatively useless. Despite its prestige throughout the nineteenth century, in a few more years it will be regarded as a mere historical curiosity.
This double evolution is the result of simultaneous efforts on the part of a great number of economists. It is almost impossible to trace a regular sequence of advances from one to the other, and we shall content ourselves with a mere mention of the names of those who have contributed most to it, their actual words being quoted whenever possible.[1151]
(a) In the first place, we have a number of differential revenues which are exactly analogous to the rent of land. Equal quantities, or, as the English economists prefer to put it, equal doses of capital and labour applied to different lands yield different revenues: such was the classic statement of the law of rent. Ricardo attributed the existence of rent to the presence of particular phenomena appertaining only to land, such as diminishing returns, unequal fertility, greater or lesser distance from a market. But it has long been realised that agriculture is by no means the only domain in which capital and labour yield unequal returns.
All natural sources of wealth—mines, salt-works, and fisheries—give rise to exactly similar phenomena. Their productivity is not identical, their fertility (if the term is permissible) presents the same differences and their position relative to a market the same variety as in the case of cultivated lands. Consequently every mine, every salt-work and fishery that is not on the margin of cultivation yields a differential revenue or rent because of its greater productivity or more convenient situation. Ricardo had recognised this in the case of mines, and Stuart Mill insisted upon its farther extension.[1152]
Further, land is not employed for tilth only; it is also frequently used for building purposes. The services which it renders in this connection are not less important than the others, and between different sites there are as many distinctions as there are between the various grades of cultivated lands. Their commercial productivity, if we may so put it, is by no means uniform. “The ground-rent of a house in a small village is but a little higher than the rent of a similar patch of ground in the open fields, but that of a shop in Cheapside will exceed this by the whole amount at which people estimate the superior facilities of money-making in the more crowded place. In this way the value of these sites is governed by the ordinary principles of rent.”[1153]
But why even confine attention to land and its uses? Degrees of productivity and differences of returns are equally evident in the case of capital. The machinery in one shop may be better, the organisation more efficient, division of labour more fully developed than in another because of the relatively greater abundance of capital, with the result that the production in the one case will exceed the production in the other, resulting in a supplementary gain in the case of the first shop.[1154] Similarly, the production of one worker as compared with another is frequently unequal. One man without any greater effort may get through more work than another, and the earnings of that man will exceed those of the other, so that even a workman may enjoy a supplementary gain of the nature of a differential rent. And not among workmen only do aptitudes differ, but also among entrepreneurs. Rent of ability plays an important rÔle in determining the different degrees of success experienced by different undertakings and the unequal revenues which they yield. “The extra gains which any producer or dealer obtains through superior talents for business or superior business arrangements are very much of a similar kind.” That is how Mill[1155] expressed it, content merely to repeat an idea which Senior had expressed in his Political Economy as early as the year 1836, where he applies the term “rent” to “all peculiar advantages of extraordinary qualities of body and mind.”[1156]
The simple suggestion thrown out by Mill and Senior has long since been developed into a full-blown theory by Francis Walker, the American economist. The conception of profits as the remuneration of the entrepreneur’s exceptional skill is examined in his Treatise on Political Economy, and is further treated in considerable detail in the Quarterly Journal of Economics for April 1887.[1157]
We have already commented upon the optimistic tendencies of certain American economists. Carey was a case in point; so is Walker. In a work entitled The Wages Question, published in 1876, Walker made a successful attack upon that most pessimistic of theories, the wages fund, and forced economists to recognise that to some extent at any rate the wages depended upon the productivity of the undertaking. But to show the possibility of wages growing with the increased productivity of industry was hardly enough to satisfy sensitive consciences. Walker was particularly anxious to foil the socialists by showing that profit is not the outcome of exploitation, and it was with a view to such demonstration that the doctrine of rent was so greedily seized upon.
By the term “profit” Walker understands the special remuneration of the entrepreneur,[1158] omitting any interest which he may draw as the possessor of capital. This distinguishes him from the majority of English economists, who, contrary to Continental practice, have always persisted in confusing the functions of the entrepreneur and the capitalist. Neither is he content to regard his work as confined to simple business arrangement and superintendence, which would result in his being paid a salary equal to that of a managing director. His work is altogether of a more dignified character, and consists largely in anticipating the fluctuations of the market and in organising production to meet them—in a word, in adapting supply to demand. The entrepreneur is the true leader of economic progress—a real “captain of industry.”[1159]
All this implies, says Walker, differences in industrial revenues exactly analogous to the differences in agricultural incomes. Some industries yield no profit at all beyond remunerating capital and labour at the normal rate and leaving enough for the entrepreneur to prevent his abandoning the undertaking altogether. Other industries yield a little more, and by imperceptible gradations we pass from such mediocre undertakings to more prosperous ones, and finally reach those that yield immense profits. The question then arises as to whether such abnormal profits in any way represent wages that have been withheld from the workers. This is not at all likely, because wages are often highest where profits are greatest. CÆteris paribus, the probability is that the greater profit in the one industry as compared with another implies the greater capacity of the entrepreneur in the one case than in the other. The superior income is a pure surplus like the rent of land. “Under free and full competition,” says Walker, “the successful employers of labour would earn a remuneration which would be exactly measured, in the case of each man, by the amount of wealth which he could produce, with a given application of labour and capital, over and above what would be produced by employers of the lowest industrial, or no-profits, grade, making use of the same amounts of labour and capital, just as rent measures the surplus of the produce of the better lands over and above what would be produced by the same application of labour and capital to the least productive lands which contribute to the supply of the market, lands which themselves bear no rent.”[1160]
Walker’s theory contains a good deal of truth, although it is not, perhaps, quite as new as he thought it was. The opinions of Mill and Senior have already been referred to, and more than one Continental economist, from J. B. Say to Mangoldt, and including Hermann,[1161] have propounded similar views. Nor has the doctrine ever been completely triumphant in economic circles. Most contemporary writers, no doubt, regard profit as a kind of rent, due partly, but only partly, to the personal ability of the entrepreneur.[1162] Other economists—such as Marshall,[1163] for example—think that they can trace some other elements as well, such as insurance against risk and payment for the necessary expenses of training the entrepreneur.[1164] Walras, on the other hand, omits these last two items and points out that under static conditions the entrepreneur would neither gain nor lose. The sole source of profit, then, are those “dynamic” rents which are the result, so to speak, of the perpetual displacements of equilibrium in a progressive society. But these dynamic rents are extremely varied in character and bear no relation to the personal qualities of the entrepreneur.
Clark[1165] and others, although subscribing to Walras’s dictum that profits are really composed of rents, think that there may be static as well as dynamic rents and that Walras’s hypothesis of a uniform net cost for all undertakings is altogether too abstract. Only in the case of the marginal producer, whose expenses are highest, is there anything like equilibrium between costs and price. The other producers even when there is no such thing as a temporary displacement of equilibrium, are able to make substantial incomes out of the various species of differential rents already mentioned—proximity to market, better machinery, greater capital, etc. Marshall speaks of such incomes as composite rent.[1166]
Walker’s theory has evidently not been accepted without considerable reservations. And we need only remind ourselves of the way in which dividends are usually distributed among shareholders to realise the inadequacy of his conception of rent and the exaggerated nature of his attempted justification. Would anyone suggest, for example, that such dividends are merely the result of exceptional ability?[1167]
This attempted explanation of profit affords, perhaps, the most interesting illustration of the extension of the concept rent, although it is by no means the only one. The Ricardian theory, worked out to its logical conclusion, reveals the interesting fact that there are as many kinds of rents as there are different situations in the economic world. Whenever it becomes necessary to unravel the mystery surrounding individual inequalities of income recourse is had to a generalised theory of rent. “All advantages, in fact, which one competitor has over another, whether natural or acquired,[1168] whether personal or the result of social arrangements … assimilate the possessor of the advantage to a receiver of rent.”[1169] Something of the variety of concrete life is thus reintroduced into the Classical theory of distribution, although all this was at first rigidly excluded by the doctrine of equality of interest and uniformity of wages.[1170] The theory of rent is an indispensable complement of the Classical theory of distribution, giving the whole thing a much more realistic aspect. It is, as it were, the keystone of the whole structure.
(b) But the theory has also undergone another species of transformation. Ricardo conceived of rent as essentially a differential revenue arising out of the differences in the fertility of soils.[1171] Were all lands equally fertile there would be no rent. The same remark applies to the various species of rent discovered since then. There is always some inherent difference which explains the emergence of rent, such as the greater suitability of a building site, the greater vigour of the worker, or the superior intelligence of the entrepreneur. They are all of a type. Entrepreneurs who produce the same article, workmen toiling at the same trade, capitals employed in the same kind of undertaking, may be grouped in an order of diminishing productivity, much as Ricardo grouped the various species of lands. The last entrepreneur of the series, the last worker, or the last item of capital each earns just enough to keep them at that kind of employment. All the others produce more, and, seeing that they all sell their goods or services at the same price, they draw a rent which is greater than the income enjoyed by the others by the difference between their productivity and that of the last of the series. The whole economic world seems to be under the dominion of a kind of law of unequal fertility, not of lands merely, but of capital and individual capacity as well—a law which is sufficiently general in its application to explain all inequalities in the revenues of the different factors of production.
We cannot help feeling the artificiality of this conception and wondering whether the differences in revenues are not capable of explanation upon the basis of a simpler and more general principle. Is it impossible to take account of them directly and to treat them as something other than an exception or an anomaly? One cannot avoid asking such questions, and the reply is not far to seek.
Doubts arise as soon as we realise that land may yield rent apart from any inequality in its fertility. “If the whole land of a country were required for cultivation, all of it might yield a rent,” says Stuart Mill.[1172] Apparently all that is needed is an intense demand and a supply that is never equal to that demand, so that the price is permanently above the cost of production.[1173] In such a case even the worst land—assuming that all is not of equal fertility—would yield a rent. Mill was of opinion that this rarely happened in the case of land, but was by no means uncommon in the case of mines.[1174] Obviously, then, rent is not merely the outcome of unequal fertility, and the cause must be sought elsewhere. Stuart Mill had obviously foreseen this when he said that “a thing which is limited in quantity is still a monopolised article.”[1175]
But if such be the explanation of rent on land which is the last to be put under cultivation, what is the explanation in the case of better lands? We are not sure that Stuart Mill foresaw this problem.
This is how he explains the emergence of rent on land No. 1. Production having become insufficient to meet demand, prices go up; but it is only when they have reached a certain level—a level, that is to say, sufficiently high to secure a normal return on the capital and labour employed—that these lands will be brought under cultivation.[1176]
The cause of rent in this case is obviously the growth of demand and not the cultivation of land No. 2, because the cultivation only took place when the prices had risen.[1177] Moreover, the effect of this cultivation will be rather to check than to encourage the growth of rent by arresting this upward trend of prices through increasing the quantity of corn on the market. The rent of land No. 1 is consequently a scarcity rent which results directly from an increased demand and is independent of the quality of the land. The real cause of rent on all lands, whether good or bad, is really the same, namely, the insufficiency of supply to meet demand.
A similar process of reasoning might be applied to the other differential rents already mentioned, and the conclusion arrived at is that rent, whatever form it take, is not an anomaly, but a perfectly normal consequence of the general laws of value. Whenever any commodity, from whatever cause, acquires scarcity value and its price exceeds its cost of production, there results a rent for the seller of that product. Such is the general formula, and therein we have a law that is quite independent of the law of diminishing returns and of the unequal fertility of land.[1178]
But the issue was not decided at a single stroke. English political economy is so thoroughly impregnated with Ricardian ideas that it still adheres to the conception of a differential rent. Continental economists, on the other hand, have always regarded it as a more or less natural result of the laws of demand and supply. J. B. Say had long since made the suggestion that the existence of rent is due to the needs of society and the prices which it can afford to pay for its corn.[1179] A German economist of the name of Hermann, a professor at Munich, in his original and suggestive work, Staatswirtschaftliche Untersuchungen, published in 1832, claims that the rent of land is simply a species of the income of fixed capital. Whereas circulating capital, because of its superior mobility, has almost always a uniform rate of interest, fixed capital, which has not that mobility and which cannot be increased with the same facility, has a revenue which is generally greater than that of circulating capital. This surplus revenue or rent, instead of being a mere transitory phenomenon, might easily become permanent provided the new fixed capital which enters into competition with it has a lesser degree of productivity. Such precisely is the case with land.[1180] A little later another German of the name of Mangoldt defined rent as a scarcity price which does not benefit all the factors of production equally, but only those which cannot be readily increased in amount. And rent appears in the guise of a differential revenue simply because scarcity is always relative and is frequently kept in check by substitutes which generally give a smaller margin of profit.[1181] SchÄffle, in a work partly devoted to the subject of rent,[1182] published in 1867, insists on the idea that the soil furnishes rent not because it is a gift of nature, but simply because of its immobility and the impossibility either of removing it or of increasing its quantity. Finally, Karl Menger, in his GrundsÄtze der Volkswirtschaftslehre, published in 1872, in outlining the foundations of the modern doctrine of value, assimilated the theory of rent to the general theory of prices by categorically declaring that “the products of land as far as the nature of their value is concerned afford no exception to the general rule, which applies to the value of the services of a machine or a tool, of a house or a factory, or any other economic good.”[1183]
The only difference, apparently, which recent economists recognise between rents conceived of in this fashion is their greater or lesser duration. The rent furnished by a first-class machine will disappear very readily because new machines can be turned out to compete with it. But when the rent is due to superior natural qualities, whether of land or of men, the element of rent will not be so easily got rid of. To borrow a phrase of Pareto’s, we may say that the rent will be of a more or less permanent character, according to the ease with which savings can be transformed into capital of a more or less durable kind.[1184] Dr. Marshall sums up his subtle analysis of the problem under consideration as follows: “In passing from the free gifts of nature through the more permanent improvements in the soil, to less permanent improvements, to farm and factory buildings, to steam-engines, etc., and finally to the less durable and less slowly made implements we find a continuous series [of rents].”[1185]
The series, we might add, may be extended to a point at which rent becomes negative, i.e. until the conditions of demand and supply become such that the factor of production which previously yielded a supplementary revenue no longer gives even the normal rate of remuneration. ThÜnen had suggested the possibility of a negative rent, and the idea has been further developed by Pareto.
These modern writers seem to regard rent simply as a result of the ordinary operation of the laws of supply and demand. The concept rent has been generalised so that it can no longer be regarded as a curiosity or an anomaly. The law of diminishing returns loses much of its economic importance, and even the Ricardian theory which is based upon it seems imperilled. After the numerous polemics to which it has given rise, it seems as if this theory, along with the Classical theory of value, were about to be relegated to the class of doctrines in which the historian is still interested but which are apparently of little practical value.[1186]
II: UNEARNED INCREMENT AND THE PROPOSAL TO CONFISCATE RENT BY MEANS OF TAXATION
It does not appear that Ricardo fully realised the damaging consequences which would ensue if the doctrine of rent ever happened to be made the basis of an attack upon the institution of private property. He was quite satisfied with the inference which he had drawn from it in support of the free importation of corn, and did not feel called upon to defend the rent of land any more than the interest of capital, both of which seemed inseparable from a conception of private property.
Other writers proved more exacting. Despite the numerous exceptions met with in actual life, the feeling that all forms of revenue ought to be justified by some kind of personal effort on the part of the beneficiary is fairly deeply rooted in our moral nature. But according to the Ricardian theory the rent of land is a kind of income got without corresponding toil—a reward without merit, and as such it is unjust. Such seems to be the logical conclusion of the Ricardian thesis.
The conclusion thus established is further confirmed by the natural feeling that not only is rent unjust, but the whole institution of private property as well. This feeling is one which all of us share (except those fortunate individuals who happen to be landlords, perhaps!), and is, of course, much older than any doctrine of rent. Movable property is generally the personal creation of man, the result of the toil or the product of the savings, if not of the present possessor, at least of a former one. But land is a gift of nature, a bountiful creation of Providence placed at the disposal of everyone without distinction of wealth or of station. Proudhon’s celebrated dictum is known to most people: “Who made the land? God. Get thee hence, then, proprietor.”[1187] That line of argument is really very old, and Ricardo unwittingly gave it new strength.
The idea of a natural right to the land and of a common interest in it is the instinctive possession of every nation. But in England the feeling seems more general than elsewhere, because, possibly, of the number of large proprietors and of the serious abuses to which the system has given rise. It seems rooted in the legal traditions of the nations. “No absolute ownership of land,” writes Sir Frederick Pollock, “is recognised by our law-books except in the Crown. All lands are supposed to be held, immediately or mediately, of the Crown, though no rent or services may be payable, and no grant from the Crown on record.”[1188] Even as far back as the seventeenth century, Locke, in his work On Civil Government, had ventured to declare that God had given the land as common property to the children of men.
As one approaches the end of the eighteenth century the demands that all lands unlawfully taken from the public should be again restored to it become much more frequent. Sometimes the demand is put forward by otherwise obscure writers, but occasionally it finds support in distinguished and influential quarters. In 1775 a Newcastle schoolmaster of the name of Thomas Spence, in the course of a lecture given before the Philosophical Society of that town, proposed that the parishes should again seize hold of the land within their own area. Thereupon he was obliged to flee to London, where he carried on an active propaganda in support of these ideas, achieving a certain measure of success. In 1781 a distinguished professor of the University of Aberdeen of the name of Ogilvie published an anonymous essay on the rights of landed proprietorship, wherein confiscation was proposed by taxing the whole of the value of the soil which was not due to improvements effected by proprietors. But little notice was taken of his suggestions, despite the fact that they had won the approval of Reid the philosopher. Tom Paine, in a pamphlet published in 1797, gave expression to similar ideas,[1189] and the same views were put forward in a book published in 1850 by a certain Patrick Edward Dove.[1190] The following year Herbert Spencer, in his book Social Statics, claimed that the State in taking back the land would be “acting in the interests of the highest type of civilisation” and in perfect conformity with the moral law. It is true that in a subsequent work he took pains to point out that all that can be claimed for the community is the surface of the country in its original unsubdued state. “To all that value given to it by clearing, making up, prolonged culture, fencing, draining, making roads, farm buildings, etc., constituting nearly all its value, the community has no claim.”[1191] But despite this reservation the justice of the general principle is clearly recognised by him.
Other communities besides England have put forward a similar demand. Not to mention the claims made by socialists like Proudhon and the Belgian Baron Colins, and Christian Socialists like FranÇois Huet, we find that a similar method of procedure is advocated by philosophers like Renouvier, FouillÉe, and SecrÉtan. Some of them even go the length of claiming compensation for the loss which this usurpation has involved to the present generation.
Thus, a conception that was already ancient even when the law of rent was first formulated proclaimed the inalienable right of man to the soil and demanded the re-establishment of that right. We shall hear an echo of that ancient belief in all the advocates of land nationalisation, in Stuart Mill, Wallace, Henry George, and Walras;[1192] and this is one of the many links that bind them to those earlier writers. Gossen is a solitary exception.
But a simple pronouncement on the illegality of property does not take us very far. Appropriation of public property for private purposes is undoubtedly a great injustice, but the transaction is so old that retribution would serve little useful purpose, and the authors, were they still alive, would be safely ensconced behind their prescriptive rights. Moreover, most of the present proprietors, possibly all of them, cannot be accused of violent theft. They have acquired their land in a perfectly regular fashion, giving of their toil or their savings in exchange for it. To them it is merely an instrument of production, and their possession of it as legally justifiable as the ownership of a machine or any other form of capital. To take it away from them without some indemnity would not be to repair the old injustice, but to create a new one. Hence it is that the doctrine of the right of the community to the land had little more than philosophic interest until such time as it begot a new theory—the theory of rent.
What the Ricardian theory really proves is the accumulative nature of the benefits accruing from the possession of land. This spontaneous, automatic character of rent makes it unique: to no other form of revenue does it belong. The extension of cultivation, the increase of population, the growing demand for commodities, means an indefinite progression in the value of land. The interest, initiative, and intelligence of the proprietor are of no account. Everything depends upon the development of the social environment. This value which is created by the community should also belong to it. Just as the landed proprietors in times past filched the land, so they to-day absorb this income. But why allow this injustice to continue?
“Suppose,” says Stuart Mill, “that there is a kind of income which constantly tends to increase without any exertion or sacrifice on the part of the owners, these owners constituting a class in the community whom the natural course of things progressively enriches consistently with complete passiveness on their own part. In such a case it would be no violation of the principles on which private property is founded if the State should appropriate this increase of wealth, or part of it, as it arises. This would not properly be taking anything from anybody; it would merely be applying an accession of wealth created by circumstances to the benefit of society, instead of allowing it to become an unearned appendage to the riches of a particular class. Now this is actually the case with rent.”[1193] The argument seems quite decisive. At any rate, Ricardo’s book was hardly out of the press before the demand for confiscation was renewed.
His friend James Mill, writing in 1821, claimed that the State could legitimately appropriate to itself not only the present rent of land, but also all future increments of the same, with a view to compensating for public expenditure.[1194] The Saint-Simonians, a little later, expressed a similar view.[1195] But it was James Mill’s son, John Stuart Mill, who showed the warmest attachment to this idea. The Principles contains a general outline of his reform plan, which took a still more definite shape in the programme of the Land Tenure Reform Association, founded in 1870, and in the discussions and explanations which accompanied it.[1196]
The following are the essential points: (1) The State will only appropriate for its own use the future rents of land; that is, the rents paid after the proposed reform has been accomplished. (2) A practical beginning will be made by valuing the whole of the land, and a periodical revaluation will be made with a view to determining the increase in its value, and whether such increase is or is not the result of communal activity. A general tax would transfer this benefit to the State.[1197] (3) Should any proprietor consider himself unfairly treated the State would give him the option of paying the new tax or of buying back the property at the price obtainable for it had he determined to sell just when the reform was being brought in.
Mill was opposed to immediate nationalisation. Not that he thought it unjust; on the contrary, he was fully convinced of its equity. But our experience of State administration and of the work of municipal bodies did not seem to him to warrant any great faith in the utility of any such measure. He was afraid that “many years would elapse before the revenue realised for the State would be sufficient to pay the indemnity which would be justly claimed by the dispossessed proprietors.”[1198]
Nor did he attempt to disguise the fact that the financial results would in his opinion be somewhat insignificant and the scope of the reform naturally somewhat limited. A few years only were to elapse before another writer proposed a much more radical measure which was to effect a veritable social revolution. It was a project to abolish poverty and to secure distributive justice that Henry George now launched on the strength of his belief in the doctrine of rent.
Henry George (1839-1897) was not a professional economist. He was a self-made, self-taught man who followed a variety of occupations before he finally blossomed forth as a publicist. At the age of sixteen he went to sea, and led a roving life until 1861, when he settled down at San Francisco as a compositor, finally becoming editor of a daily paper in that city. He witnessed the rapid expansion of San Francisco and the development of the surrounding districts as the result of the great influx of gold-diggers. He also saw something of the agricultural exploitation of the western States. The enormous increase in the value of land and the fever of speculation which resulted from this naturally left a lasting impression upon him. Progress and Poverty (1879), the book which established his fame, is wholly inspired by these ideas.[1199]
The book aroused the greatest enthusiasm. It has all the liveliness of journalism and the eloquence of oratory, but has neither the precision nor the finality of a work of science. Its economic heresies, though obvious enough, detracted nothing from its powerful appeal, and the wonderful setting in which the whole problem of poverty was placed has not been without its effect even upon economists;[1200] nor is the powerful agitation to which the book gave rise by any means extinct.
It seemed to Henry George that landed proprietors, in virtue of the monopoly which they possess, absorb not merely a part but almost the whole of the benefits which accrue from the increase of population and the perfection of machinery. The progress of civilisation seems helpless to narrow the breach separating the rich from the poor. While rents go up interest goes down and wages fall to a minimum. Every country presents the same phenomena—extreme poverty at one end of the scale accompanied by extravagant luxury at the other.
Is this unhappy result a kind of hybrid begotten of the Malthusian law and the law of diminishing returns? Must we, after all, agree with Malthus, Ricardo, and Mill when they say that the cause is to be sought in the increase of population outrunning the means of subsistence? Henry George thinks not, for experience everywhere seems to show that the rich are growing in numbers much more rapidly than the growth of population warrants, and that organisation is really performing wonderful feats under very difficult conditions.[1201]
Is it caused by the exploitation of labour by capital, as the socialists seem to think? George apparently thinks not, for the two factors, capital and labour, seem to him so intimately connected that both of them are easily exploited by the landowners. Every man, he thinks, could devote his energies either to the production of capital or to supplying labour—capital and labour being merely different manifestations of the same force, human effort. The benefits resulting from the formation of capital on the one hand and from the exercise of labour on the other tend to be equal, and any inequality is immediately counteracted by a larger production of one or other of these two factors, with the result that equilibrium is soon re-established. The rate of interest and the rate of wages can never vary inversely.[1202]
But if we can neither accuse over-population nor lay the blame at the door of exploitation, how are we to account for the fact that the labourer is still so miserably paid? It is entirely, he thinks, the result of rent. Hitherto exceedingly severe in his handling of some Ricardian theories, George has no hesitation in pushing the doctrine of rent to its extreme limits.
He points out that owing to the existence of competition between capital and labour the rates of interest and wages are determined by the yield of that capital and labour when applied to land on the margin of cultivation—that is, to land that yields no surplus or rent. And in virtue of the natural monopoly which landowners possess they can exact for the use of other lands any amount they like beyond this minimum. The result is that rent goes on gradually increasing as the limits of cultivation extend. As population grows and needs become more extensive and varied, as technical processes become more perfect and labour becomes less and less necessary, new lands are brought under cultivation, such lands being generally of an inferior character. The result is that the lands which were previously cultivated will always yield a rent to the proprietor. Thus the progress of civilisation, whatever form it take, always tends to the same result—a higher rent for the benefit of the landed proprietor.[1203]
“Here is a little village; in ten years it will be a great city—in ten years the railroad will have taken the place of the stage-coach, the electric light of the candle; it will abound with all the machinery and improvements that so enormously multiply the effective power of labour. Will, in ten years, interest be any higher?” He will tell you “No!” “Will the wages of common labour be any higher?” He will tell you “No!” “What, then, will be higher?” “Rent: the value of land. Go, get yourself a piece of ground, and hold possession.… You may sit down and smoke your pipe; you may lie around like the lazzaroni of Naples or the lepers of Mexico; you may go up in a balloon or down a hole in the ground; and without doing one stroke of work, without adding one iota to the wealth of the community, in ten years you will be rich! In the new city you may have a luxurious mansion; but among its public buildings will be an almshouse.”[1204]
Accordingly Henry George regards rent not so much as a species of revenue which, as Stuart Mill saw, is particularly easy to absorb by means of taxation, but as the very source of all evil. Once get rid of rent, poverty will be banished, inequality of wealth will be removed, and economic crises—which George thought were the result of speculation in land—will no longer disturb the serenity of commercial life. But it is hardly enough to aim at the future increments of rent, for the damning consequences of privilege would still remain if landowners were allowed to retain even their present rents. The whole abomination must be taxed out of existence.[1205] Such a tax would yield sufficient to defray all State expenditure, and other forms of taxation could then be dispensed with. In the single tax advocated by Henry George we have a curious revival of the Physiocrats’ impÔt unique.
George’s system is open to serious criticism both from the economic and from the ethical standpoint. From the economic point of view it is obvious that the right of private property does confer upon the proprietor the right to such benefit as may accrue from a possible surplus value, but it is not at all clear—nor has George succeeded in proving it—that such a right absorbs the whole benefit which accrues from social progress. Besides, it seems rather childish to think that rent is the sole cause of poverty and that its confiscation would result in the removal of the evils of poverty.
From the point of view of equity it seems clear that George in removing one injustice is at the same time creating another. To rob the present proprietors of the rents which they draw is simply to deprive them of advantages which many of them have acquired either by means of labour or economy. Land is no longer acquired merely by occupation: the usual way of getting hold of it to-day is to buy it. And if we consider that such a transaction is just, we are bound to recognise the legitimacy of rent just as much as the interest of capital. Confiscation might be justified in the case of those who first unlawfully occupied the land. But how many of them are left now?
Further, if we are going to relieve the landowner of the rent which results from the progress of civilisation, we ought to indemnify him for any “decrement” which may have resulted through no error of his. Stuart Mill anticipated this objection[1206] and gave the dissatisfied proprietor the option of selling his land at a price equal to its market value at the time when the reform was inaugurated.[1207] Henry George apparently never faced this aspect of the question. He thought that “decrement” would be very exceptional indeed, and that the persistence of increment values is as thoroughly established as any law in the physical world ever was.
Mill’s system, though much more moderate than George’s, is by no means beyond reproach. The common element in both systems—i.e. the emphasis laid upon unearned increments—has been criticised both by socialists and economists.
The socialists point out that if the object is to get rid of unearned incomes the interest of capital as well as the rent of land ought to be confiscated. While agreeing with the object, they claim that they are more logical in demanding the extinction of both kinds. But this criticism is not quite a complete answer to Mill and his supporters, for the latter regarded interest as the legitimate remuneration, if not of the labour, at least of the abstinence of the capitalist. Interest is the remuneration of sacrifice.[1208] But the socialists are not convinced. They cannot see how the negative effort of the capitalist is to be compared with the positive effort of the labourer, and they have not been sparing in their denunciation of Mill and his followers.
The economists adopt a different line of criticism. The argument is that the rent of land is illegal because the progress of society has contributed more to it than the work of the proprietor. But is there any kind of revenue which is altogether free from such criticism? Every kind of revenue contains some elements that are essentially social in character; that is, elements that depend entirely upon the demands of society. The growth of social demand often brings to capital as well as to land, to labour as well as to capital, quite unexpected and occasionally extravagant incomes. Has not political economy in the course of its development been forced to recognise the existence of a whole series of rents differing from the rent of land merely in respect of their shorter duration? Was the fortune of the celebrated hunchback of Quincampoix Street, who lived in the glorious days of Law’s system, in any way different from the fortune of the Duke of Westminster, who owns large areas of the city of London? Or is the surplus value conferred upon old capital by a mere fall in the rate of interest in any respect different from the surplus value acquired by land under the pressure of growing population? The most striking thing, apparently, about unearned increment is its ubiquity. Society, presumably, does not distribute its revenues in the way a schoolmaster rewards the most painstaking or the most meritorious pupil. It puts a premium upon the services that are rarest, but never inquires whether they involved any greater amount of sacrifice. Such premiums simply denote the intensity of its own demands. What right have we to isolate one of these and demand that it and it alone shall be confiscated?
Stuart Mill has given the only reply that is possible by showing that none of the other rents has either the persistence or the generality of the rent of land.[1209] That reply seems clear enough to justify at least a partial application of the systems of Henry George and Stuart Mill.
About the year 1880 several leagues were founded in England, America, and Australia with a view to propagating what George’s followers call his “sublime truths.” During the last few years they have not been nearly so active, although several attempts have since been made, especially by municipalities, to tax surplus values.[1210] Even as far back as 1807 a law was passed in France requiring riparian owners to pay compensation in cases where their estates bordered upon public works which in any way contributed to the greater value of the property. But the law is very seldom enforced.[1211] In London the principle was recognised as far back as the seventeenth century, but has long since fallen into desuetude.[1212] The idea is again gaining ground very rapidly in England and Germany especially. Numerous projects have been launched with a view to taxing the surplus value of urban lands not used for building purposes, and some of the schemes have been fairly successful. The adoption of this principle was one of the more prominent features of the famous English Budget of 1909, which roused so much opposition and brought the long constitutional struggle between the Liberal Government and the House of Lords to a head. The economists are still divided on the question. The imposition of a Werthzuwachssteuer by certain German municipalities led to a fresh discussion of the topic in a number of reviews and polemical works, but the principle stands enshrined in the German Imperial Act of 1911.
These ideas have never obtained the same hold in France, where property is subdivided to a much greater extent than it is in England, and where rent is accordingly distributed among a greater number of cultivators and naturally raises less opposition. In addition to this, the slow growth of the population in France makes the problem less acute than it is in Germany, where the workers find that an increasing proportion of wages is absorbed in the payment of rent. But the question will demand attention sooner or later, and France, like other countries, will have to look for an answer.
III: SYSTEMS OF LAND NATIONALISATION
The “land-nationalisers,” whose schemes now come under consideration, not content with the taxation of a part of the revenue of the land, demand that the whole of it should again become the property of the State.
Apparently a much more thoroughgoing suggestion than any of the preceding ones, especially Mill’s, in reality it is a much simpler system that is proposed. The advocates of land nationalisation think, with Mill, that the surplus value of the land should be reserved for the State, and, like him, they have great faith in the persistence and continuity of this surplus value. They also agree with him when he puts forward the claim of society to the possession of the soil, but they never suggest that it should be taken from its present owners. They reject the distinction between earned and unearned income and consider that they are both equally legitimate. But, unlike Mill, they never feel that they can say to the landed proprietor, “Thus far and no farther.” Appropriation is advocated simply on the ground of its public utility, and care is taken to hedge it round with all kinds of guarantees. Proprietors are to be indemnified not merely for the loss of income it would immediately involve, but also for the loss of any future revenue upon which they had reckoned. Could anything be simpler or more reasonable?
The practical interest of a system of this kind obviously cannot be very great. Such a fundamental change in the institution of private property, especially in old countries, could only be accomplished by means of a revolution. Revolutions are to be undertaken in no light-hearted fashion, and never without the sanction of absolute necessity. Curiously enough, all the changes made in France, for example, since the Revolution, in Russia since the emancipation of the serfs, and in Ireland during the last hundred years have been in the opposite direction. They have extended rather than contracted the area of private property. Russia at the present moment is engaged in this very task. The prospects of nationalisation are certainly not very rosy. New countries may perhaps prove more favourable grounds for experiment: there the State may possibly show itself more jealous of its rights. But as a matter of fact it is just in those countries that the State is most reckless, the reason undoubtedly being that the abuses of private property have not yet had time to make their influence felt.
The extremely hypothetical character of the schemes now under consideration relieves us of the necessity of examining their organisation in any detail, although this question of the minutiÆ is apparently one that strongly appeals to the creative instinct of these Utopians.
Of greater interest are the grounds on which they base their demand and the economic processes by means of which they hope to accomplish their aims. From this point of view the most interesting systems are those of Gossen and Walras. Gossen’s scheme is expounded in a curious volume entitled Entwickelung der Gesetze des menschlichen Verkehrs, and Walras’s is developed in a memorandum addressed by the author to the Vaudoise Society of Natural Sciences in 1880. Both works contain ideas from which the economist may learn a good deal, and both writers claim that the successful adoption of their schemes would enable the State to make an offer of free land to all citizens.
(a) Gossen’s book appeared in 1853.[1213] It is a curious coincidence that the French Bastiat, the American Carey, and the German Gossen should all be engaged in developing an optimistic thesis just about the same time. Of the three, Gossen’s was the most optimistic and by far the most scientific. He concurred in the judgment of the Physiocrats, who believed that the world was providentially subjected to the action of beneficent laws which men must know and obey if they are ever to become happy. Such, he thought, are the laws of enjoyment, or of utility or ophelimity, as we call them to-day. A person who merely follows his own interests finds that unconsciously, perhaps, he has been contributing to the happiness of the whole of society. Gossen gives a remarkably clear proof of the theory of maximum ophelimity, based upon a very ingenious analysis of wants. According to this theory, every individual who pursues the satisfaction of his own desires under a rÉgime of free competition helps in the realisation of the maximum satisfaction by everybody concerned.
If it be true that each individual in pursuit of personal enjoyment unwittingly contributes to the well-being of the whole community, it is clear that everyone ought to be given the utmost possible freedom in the pursuit of his interests. But there are two great obstacles in the way of this. The first of these is want of capital, which Gossen thought could be obviated by creating a huge Government bank which would lend capital whenever required. The mechanism of the bank is described in considerable detail. The second obstacle is the existence of private property in land. If man is to develop all his faculties and to use them to their utmost extent in the production of wealth, he must be allowed to choose his work freely and to carry it on under the most advantageous circumstances possible. But private property hinders free choice. “Thanks to this one fact,” says Gossen, “the obstinacy of a single proprietor often hinders the best development of the land which belongs to him and prevents its utilisation in the fashion that would best meet the needs of production. The necessity for the compulsory purchase of land for industrial purposes, for the making of roads, railways, or for developing mines, affords an indication of the unsatisfactory condition of landholding as it exists at present.”[1214]
It is obviously necessary that the community’s right to the soil should again be restored to it, so that everyone might be free to demand and to obtain the use of as much of it as he required. Every industry could then choose that locality which seemed best fitted for it. The right of using the land might be disposed of by public auction and given to the bidder who offered the highest rent. There would thus be a kind of guarantee that the organisation of production at any one moment was being carried on in the most favourable fashion—relatively, that is to say, to the knowledge possessed by the community at that period.[1215]
(b) Walras’s position is not quite so frankly utilitarian as Gossen’s. It was the analysis of the respective rÔles of the individual and the State, of which he gave an exposition in his lectures on La ThÉorie gÉnÉrale de la SociÉtÉ (1867), that inspired his reform. Following Henry George, he sought a reconciliation of individualism and socialism[1216]—a reconciliation which he variously speaks of under the terms “liberal socialism,” “synthetic socialism,” or simply “syntheticism.”[1217]
It was his opinion that no real opposition existed between the State and the individual, that the one is just the complement of the other. Taken separately, it has been well said that they are nothing better than abstractions; the only real man is the social man—man living in society. This man, as we know, has two kinds of interests—the one personal or individual, and as such opposed to the interests of other beings; the other social or collective, common both to himself and his fellows—and unless these are secured the existence of the race is immediately jeopardised. The two groups of interests are equally important, for they are both equally necessary for the life of the social being. The State and the individual are mere phases in the life of the same being, according as we think of him pursuing the collective interests which he has in common with his fellow-men or his more personal and individual interests. Each has its own sphere of activity definitely marked off from the other by the diverse nature of the respective tasks which they have to perform.
The duty of the State is to secure those general conditions of existence which are necessary for everybody alike. Upon the individual devolves the duty of determining his own personal position in society through perseverance in the exercise of his own capacity in any line of activity which he may himself choose. But if both of them, individual and State alike, are to perform their respective tasks efficiently, they must be supplied with all necessary resources. To the individual should accrue the wealth which results from labour and saving, to the State the revenue which results from general social progress—i.e. the rent of land. Provided for in the manner indicated, there would be no necessity for taking away from the individual a portion of the fruit of his labour by means of taxation. Collective ownership of land and rent, private ownership of capital and labour, together with their incomes—such is the social organisation which Walras thought would solve the problem of distribution: equal conditions, coupled with unequal situations.[1218]
The reforms of Gossen and Walras, starting from a different angle as they do, depend for their realisation upon conditions that are exactly identical. Both of them evince the most scrupulous respect for the prescriptive rights of the present owners; and both agree that the State has no more right to appropriate future rents[1219] upon which these owners rely, in the manner suggested by John Stuart Mill, than it has to confiscate present rents, as Henry George proposed. The only way in which reform can be fairly carried out is to buy back the land, including in the purchase price any surplus values upon which the present proprietors have set their hopes. The most expedient way, perhaps, would be to issue bonds and to offer these to the proprietors in exchange for the land. The rents, which would still be received by the State—for there is no prospect of cessation of growth—would be employed partly in paying interest on the debt and partly in redeeming it; so that at the end of a certain period, say fifty years, the State would have paid back all the capital and it alone would henceforth draw the rents.[1220]
It would have been unnecessary to add anything to the exposition as given by Walras but for the objection which he himself raised to it, and which led him to give a very interesting account of his belief in the permanence of rent.
“If,” says Walras, “the State pays to the proprietors the exact value of their lands, reckoning in that price a sum equal to the estimated value of the future rent, what is it going to gain by the bargain?” If the value of the soil is carefully computed in the manner indicated above, then the interest on the capital borrowed to effect the purchase and the rents received must exactly balance one another, for one is just the price of the other, and the State will find that the rent of land is insufficient to repay the outlay involved. The results will cancel one another. Some inconveniences will doubtless be avoided, but there will be no outstanding advantage. How are we to get rid of this objection?
The difficulty is soon removed, for once the system outlined above is adopted there will be an end to all speculation in land. When individual buyers find that they must pay the owners a price that covers all surplus values which the land may possibly yield in the future, which would mean that they would not get any of that surplus value themselves, they will not be quite so keen. This is not the case, however, at the present time. Speculation of this kind is rife everywhere, for the good reason that a surplus value is always a possible contingency. The more perspicacious or better informed a buyer is, the more firmly does he believe in this advance and the more careful is he to safeguard his future interests. The State, so soon as it has bought back the land, will be in the position of the speculator in question. Walras is of the opinion that the surplus value is certain to grow in future even more rapidly than the actual possessors of the land imagine. Thanks to economic evolution, what the private proprietor can only speculate on the State can rely upon with absolute certainty.[1221]
“I believe, along with several competent economists, that when humanity left the purely agricultural system under which it had lived for thousands of years and entered upon a rÉgime of industry and commerce, under which agriculture is still necessary to feed a growing population, but only possible with the expenditure of a vast amount of capital, it achieved a notable triumph, and the step it then took marks a veritable advance in economic evolution. I also believe that as the result of this evolution rent will continue to grow, but without involving any scarcity or increase in the value of agricultural produce—a fact that has escaped everyone except the wideawake and the well-informed, and by which proprietors alone have profited. I further believe that if the State had bought the land before this evolution had taken place and had then given of its resources to further such development, even the normal growth of this surplus value would have been ample to clear the debt.”[1222]
Walras agrees with Ricardo, and a kind of rehabilitation of the Ricardian thesis drives him to the conclusion that the future must witness a further growth of this surplus value of land—merely because of the limited quantity of land in existence. There is this difference, however. Whereas Ricardo bases his whole contention upon the validity of the law of diminishing returns, Walras will not even entertain the thought of a possible diminution in the amount of agricultural produce. The inevitable progress of society which leads it on from a purely agricultural stage right up to the industrial-commercial stage, from extensive to intensive cultivation, must result in increasing the value of land. The State would ease this transitional process by a measure of appropriation, and could make a solid contribution to the success of this gigantic undertaking, which is to apply not merely to land, but also to railways and mines, etc.[1223]
(c) Numerous and various are the reasons invoked by the advocates of land nationalisation. Gossen’s ideal is the maximum product, while Walras’s first care is to supply the State with all necessary resources. A final class of writers regards it as an excellent opportunity of giving everybody access to the soil. It was this ideal of free land that inspired the late Alfred Russel Wallace to write his book Land Nationalisation: its Necessity and its Aims, and to inaugurate his campaign in favour of nationalisation in 1882.
Wallace imagined that the mere right of free land would put an end for ever to the worker’s dependence upon the goodwill of the capitalist. Nobody would be found willing to work for starvation wages were everyone certain that on a free piece of land he would always obtain his daily bread. None would suffer hunger any longer, for the soil, at any rate, would always be there awaiting cultivation. Free access to the land would by itself solve the problem of poverty and want, and this would be by no means one of the least of the benefits of land nationalisation.[1224]
The essential thing, in his opinion, is to give to every worker the right to possess and to cultivate a portion of the soil.[1225] His proposal is that once nationalisation is an accomplished fact every individual at least once in his lifetime should be given the opportunity of choosing a plot of land of from one to five acres in extent wherever he likes on condition that he personally occupies and cultivates it.[1226]
The extremely simple character of the proposal makes it all the more notorious. Unlike the other schemes, it is not based upon any subtle, complex economic analysis. But it supplies a most convincing platform theme. Closer scrutiny, however, reveals its almost childish nature.
The cultivation even of the smallest piece of land requires some capital, which the advocates of free land appear to forget altogether. The amount of capital so required may not infrequently be in excess of the modest sum possessed by the working man. They also seem oblivious of the fact that the land does not produce all the year round: there must of necessity be a period of quiescence when the seeds are germinating. And if we are to suppose that the worker has sufficient reserve to wait for the harvest, why not admit at once that he has also enough to tide over a period of unemployment? A few pounds in the bank to which he can have access whenever he likes would certainly be much more serviceable in mid-winter, say, than a plot of land situated some distance away. Cultivation also requires capacity as well as capital. You cannot improvise the peasant, and a first-class artisan may be a very indifferent cultivator. The experience of distress committees seems to prove this point. The advocates of free land have a mistaken belief in the efficacy of the proposed remedy, and experience would quickly show them how difficult it would be to apply it.[1227]
IV: SOCIALIST EXTENSIONS OF THE DOCTRINE OF RENT
The writers who have hitherto engaged our attention were all of them individualists. They had no quarrel with the institution of private property as such, nor were they hostile to the existence of capital or to the personal advantage which may accrue from the possession of exceptional talent or ability. The orthodox socialist, on the other hand, is distinguished by an aversion to both interest and rent, and some of them even go the length of denying the individual’s claim to any special benefit accruing from personal ability if it has the effect of increasing his income beyond the mere remuneration of labour.
Between the two conceptions is a veritable abyss, and the question arises as to whether it can ever be bridged. Some writers confidently reply in the affirmative. “It is the easiest thing in the world. Just treat your interest on capital and the revenue derived from exceptional capacity as rent, and the theory of rent will supply a justification not only for the appropriation of land, but also for universal collectivism.” It was in England that this idea was first mooted.
England, the true home of socialism, the England of Godwin and Hall, of Thompson and Owen, after the first outburst of socialist activity over seventy years before, had not given birth to a single socialist scheme. With the exception of John Stuart Mill, who was impressed by the French socialists, English writers had remained quite indifferent to the ideas that were agitating Europe. Karl Marx toiled at the production of his masterpiece, Das Kapital, in the very heart of London without arousing the curiosity of a single English economist. The formation of socialist parties in Germany and France after 1870 had to intervene before the ideas of the great collectivist aroused any real enthusiasm in Great Britain, and it was not until 1880 that a small Marxian party was formed in England.[1228] Just about the same time another group of writers known as the Fabian Socialists began to preach an original and characteristically English kind of socialism.[1229]
The Fabian Society at first consisted of a small group of young men, for the most part belonging to the middle classes, and holding themselves aloof from the older political parties. The object was “the prompt reconstruction of society in accordance with the highest moral possibilities.” Success appearing somewhat remote, and being anxious for more immediate results, they allowed themselves to be led astray by ideas borrowed from the Marxian and anarchist doctrines of the Continent. But they very soon renounced the revolutionary spirit, which has so little in common with the English temperament; and in order to emphasise the difference between themselves and the advocates of brute force and the believers in a sensational historical crisis[1230] they adopted the name Fabian, which is derived from Fabius Cunctator, the famous adversary of Hannibal. The school has always been very critical both of itself and of others, somewhat afraid of public ridicule, but possessing none of the enthusiasm of apostles. Always ready to banter one another,[1231] to destroy their ancient idols, and to dispense with every social or definitely political creed, the Fabians rapidly became transformed into a society of students and propagandists whose interests are exclusively intellectual, and who believe that “in the natural philosophy of socialism light is a more important factor than heat.”[1232]
Such an attitude is hardly conducive to success in a socialist crusade, but the Fabians have left a deep impression—not so much upon working men, perhaps, as upon members of the bourgeois or middle class. Several of their members are persons of great literary distinction, such as Mr. Bernard Shaw, the dramatist and critic, Mr. and Mrs. Webb, the historians of Industrial Democracy, and Mr. H. G. Wells, the novelist. By throwing themselves into the study of social conditions of different kinds, by collaborating in the publication of reviews and newspapers without distinction of party, by publishing pamphlets and calling conferences, they have managed to stimulate interest in their ideas. A rÉsumÉ of these ideas is given in a curious collection of articles entitled the Fabian Essays, published in 1889. These essays represent the opinions of the more prominent Fabians rather than of the Fabian Society, for the society as such has only a practical policy, but no theoretical doctrine which it holds in common. It calls itself socialist,[1233] and would welcome the transformation of individual into collective property. On the other hand, it declares that it has “no distinctive opinions on the marriage question, religion, art, abstract economics, historic evolution, currency, or any other subject than its own special business of practical democracy and socialism.”[1234] The economic theories which immediately interest us here are peculiar to certain members of the society. The society as a whole was doubtless inspired by these ideas, but they have not all received official recognition at its hands, and they are not even accepted by some adherents of the school.[1235]
It is Sidney Webb more especially who has essayed the task of finding a new theoretical basis for Fabian collectivism. Having rejected the Marxian theory of labour-value, and conscious of the charm possessed by the modern theories of Jevons, of Marshall, and the Austrians, he felt the need of some new justification for the collective ownership of the means of production. Unable to free himself from the fascination which Ricardo has always exercised over his fellow-countrymen, he turns to the theory of rent of that great economist, and that theory, in his opinion, is “the very corner-stone of collectivist economy.”[1236]
It is perfectly obvious that this theory of rent affords ample justification for the appropriation of the revenue of land by proving that this revenue is purely supplementary, produced as it is only on the best lands and not on the worst, where the worker only produces the exact equivalent of his wages. There is nothing very new in this, however.
Equally valid is its justification of confiscated interest. Different kinds of capital, different machines, implements, and buildings, all of which are employed for purposes of production, show the same variety of quality, and consequently produce different quantities of material goods, just as different lands do. The employee who works with “marginal capital,” if we may so put it, or, in other words, has to make shift with the minimum of tools and machinery, without which no work at all would be possible, barely produces the equivalent of his wages. Everything that exceeds this minimum may be claimed by the capitalist as payment for the superior yield of the capital which he has supplied. Interest, accordingly, is a differential revenue—a rent which ought to be expressed as a definite quantity of produce, for such it really is, and not as so much per cent.[1237]
Finally, any who possess superior ability as compared with those who work not merely with a minimum of capital and labour, but with a minimum of intelligence and ability, produce a surplus, which they generally retain for themselves. This surplus is of the nature of a differential rent—the rent of ability. Generally it is the result of the better education received by the children of proprietors and capitalists, and it is thus the indirect outcome of private property.[1238]
This ingenious argument is not very convincing. Even though we admit that interest and possibly the greater portion of wages may only be differential revenues, their confiscation would require special justification. The attributes of capital, unlike those of land as defined in the Ricardian theory, are not natural, but have been conferred upon it by the efforts of human beings. And as to the rent of ability, it still remains to be seen whether society would benefit by the confiscation of this rent. As a scientific explanation of distribution it does not seem to us a particularly attractive one. The distribution of incomes is effected by means of exchange and depends upon prices, but Webb makes an abstraction of prices in order to concentrate upon the material product. We do not deny the existence of rent derived from fixed capital, such rent being approximately measured by comparison with the current rate of interest. But after the labours of BÖhm-Bawerk and Fisher it would seem impossible to explain this rate itself by reference to the material productivity of capital, which seems to be the essence of Webb’s theory.
The latest attempt to deduce revolutionary conclusions from the older economics and to found a theory of collectivism upon the Ricardian doctrine of rent has proved a failure. Even Webb’s friends have not shown the enthusiasm for it that they might[1239]—and this despite the constant allusion to the “three monopolies” which one meets with in their writings.
The interest of the experiment lies not so much in itself as in the indication which it affords of the more recent trend of thought in this matter. We have already drawn attention to the fact that the more immediate disciples of Marx both in France and Germany have refuted his theory of value, showing a disposition to rally to the counter-theory of final utility. We have here a group of English socialists undergoing a somewhat similar process of evolution. On every hand it seems that socialism has given up all pretension to creating a working men’s political economy alongside of the bourgeois, and it is now generally recognised that there can only be one political economy, independent altogether of all parties and social ideals, whose sole function is to give a scientific explanation of economic phenomena.
The Fabians even outdo the syndicalists in their reaction against the Marxian theories. Not only is the theory of value thrown overboard, but Marx’s whole social doctrine is rejected as well. There are two points on which the opposition is particularly marked, and although these may be outside the scope of the present chapter it is necessary to mention them in order to complete our exposition of Fabian ideas.
Marx’s social doctrine was built upon the theory of class war. Socialism was simply the creed of the proletarian. Its triumph would mean the victory of the proletariat over the bourgeoisie. Its principles are the direct antithesis of those which govern society at the present time, just as the two classes are directly opposed to one another. The Fabians entertain no such views. They think of socialism as a mere extension of the ideals of bourgeois democracy, and they would be quite content with a logical development and application of the principles which at present govern society. “The economic side of the democratic ideal is, in fact, socialism itself,” writes Sidney Webb.[1240] Our object should not be to replace the bourgeois supremacy by the proletarian ascendancy, nor even to emancipate the worker from the tyranny of the wage system (for under the socialist rÉgime, as the Fabians point out, everybody will be a wage-earner), but merely to organise industry in the interest of the community as a whole. “We do not desire to see the mines and the profits from the mines transferred to the miners, but to the community as a whole.”[1241] Socialism is not a class doctrine, but a philosophy of general interest. “Socialism is a plan for securing equal rights and opportunities for all.”[1242] Webb questions the existence of an English class struggle in the Marxian sense of the word.[1243] On the contrary: “In view of the fact that the socialist movement has been hitherto inspired, instructed, and led by members of the middle class or bourgeoisie, the Fabian Society … protests against the absurdity of socialists denouncing the very class from which socialism has sprung as specially hostile to it.” One cannot see much similarity between this point of view and that of the French syndicalists.[1244]
The Fabian philosophy of history is equally distinct. For Marx the capital fact in nineteenth-century history is the concentration of property in the hands of a privileged few, and the consequent pauperisation of the masses. The necessary consequence of this twofold development will be the revolutionary dispossession of the former by the latter.
Optimistic as they are, the Fabians are not prepared to deny the concentration of capital. According to their view, the prime fact in nineteenth-century history is not the servility of the masses, but the waning authority of the capitalists, the growing importance of collective government in national economy, and the gradual dispossession of the idlers for the sake of the workers, a process that is already well on the way towards consummation. Webb is of the opinion that socialism is being realised without any conflict, and even with the tacit approval of its victims. “Slice after slice has gradually been cut from the profits of capital, and therefore from its selling value, by socially beneficial restrictions on its user’s liberty to do as he liked with it. Slice after slice has been cut off the incomes from rent and interest by the gradual shifting of taxation from consumers to persons enjoying incomes above the average of the kingdom.… To-day almost every conceivable trade is, somewhere or other, carried on by parish, municipality, or the national Government itself without the intervention of any middleman or capitalist.… The community furnishes and maintains its own museums, parks, art galleries, libraries, concert halls, roads, streets, bridges, markets, slaughter-houses, fire-engines, lighthouses, pilots, ferries, surf-boats, steam-tugs, lifeboats, cemeteries, public baths, washhouses, pounds, harbours, piers, wharves, hospitals, dispensaries, gasworks, waterworks, tramways, telegraph cables, allotments, cow meadows, artisans’ dwellings, schools, churches, and reading-rooms.” And even where private industry is allowed to survive it is rigorously supervised and inspected. “The State in most of the larger industrial operations prescribes the age of the worker, the hours of work, the amount of air, light, cubic space, heat, lavatory accommodation, holidays, and meal-times; where, when, and how wages shall be paid; how machinery, staircases, lift-holes, mines, and quarries are to be fenced and guarded; how and when the plant shall be cleaned, repaired, and worked.… On every side the individual capitalist is being registered, inspected, controlled, and eventually superseded by the community.”[1245]
We are already in the full current of socialism, declares Mr. Webb. Our legislators are socialists without knowing it. “The economic history of the century is an almost continuous record of the progress of socialism.”[1246] The Fabians, adopting a saying of the Saint-Simonians, point out to the socialists that they ought to be content with a clear exposition of the evolution of which everyone knows something, although perhaps in a hazy fashion. “Instead of unconscious factors we become deliberate agents either to aid or resist the developments coming to our notice.”[1247]
We are some distance away from Marx here, and farther still from his syndicalist disciples. We have really been led back to the philosophy of history as it was interpreted by the German State Socialists. Must we, then, conclude that the Fabians are State Socialists who feign ignorance of the fact?
Fabian socialism, strictly speaking, is not a new scientific doctrine. It is rather a plea for economic centralisation, an idea begotten of the modern conditions of existence in Europe, as against orthodox Liberalism, which is somewhat threadbare but still holds an honourable place in the opinion of many English writers. It is highly probable that the legislative activity of the last thirty years, which friends and foes alike regard as somewhat socialistic, will appear to our descendants as a moderate movement in the direction of greater centralisation.
English politics even long before this had begun to shake off its individualism and to rid itself of the philosophic and political doctrines of the utilitarian Radicals, which Bentham and his friends had formulated early in the nineteenth century, and which still exercise a considerable influence over some people. The Fabians regard themselves as the special protagonists of the new standpoint. They would be proud to consider themselves the intellectual successors of the utilitarian Radicals, who simply claim to express the new desires of a great industrial democracy. Labour legislation and its many ramifications, municipal socialism spontaneously developing in all the big towns, the great co-operative “wholesales” in Glasgow and Manchester, furnish persuasive illustration of the practical socialism which they advocate. “It is not,” writes Mrs. Sidney Webb, “the socialism of foreign manufacture which cries for a Utopia of anarchy to be brought about by a murderous revolution, but the distinctively English socialism, the socialism which discovers itself in works and not in words, the socialism that has silently embodied itself in the Factory Acts, the Truck Acts, Employers’ Liability Acts, Public Health Acts, Artisans’ Dwellings Acts, Education Acts—in all that mass of beneficent legislation forcing the individual into the service and under the protection of the State.”[1248]
The Fabian doctrine is the latest avatar of the Ricardian theory. It would really seem impossible to draw any further conclusions from it. Everything that could possibly be attempted in that direction has already been done, although other weapons of war forged against the institution of private property may yet come out of that old armoury. But that is hardly probable, especially when we remember that economic science no longer regards rent as a kind of anomaly amid the other economic phenomena. There is no doubt as to its reality, but it has been deprived of much of the social importance that was attributed to it by Ricardo and his followers, and it has consequently lost much of its revolutionary fecundity.
The word “solidarity,” formerly a term of exclusively legal import,[1249] has during the last twenty years been employed to designate a doctrine which has aroused the greatest enthusiasm—at least in France. Every official speech pays homage to the ideal, every social conference ends with an expression of approval. Those who wish to narrow the scope of industrial warfare as well as those who wish to extend the bounds of commercial freedom base their demands upon “a sense of social solidarity,” and it is becoming quite a common experience to find writers on ethics and education who have fallen under its spell. The result is that no history of French economic doctrines can pass it by.[1250]
The fundamental idea underlying the doctrine of solidarity, namely, that the human race, taken collectively, forms one single body, of which individuals are the members, is not by any means new. St. Paul and Marcus Aurelius among the writers of antiquity, not to mention Menenius Agrippa’s well-known apologue, gave expression to this very idea in terms almost identical with those now commonly used.[1251]
Nor was the importance of heredity wholly lost upon the ancients. The hereditary transmission of moral qualities was a doctrine taught with the express sanction of a revealed religion. This doctrine of original sin is perhaps the most terrible example of solidarism that history has to reveal. Turning to profane history, we are reminded of the line of Horace:
Delicta majorum immeritus lues!
We must also remember that it was always something more than a mere theory or dogma. It was a practical rule of conduct, and as such was enjoined by law, exhorted by religion, and enforced by custom, with the result that what was preached was also practised with a thoroughness that is quite unknown at the present day. We have an illustration of this in the collective responsibility of all the members of a family or tribe whenever one of their number was found guilty of some criminal offence. A survival of this pristine custom is the Corsican vendetta of to-day.
Finally, there is that other aspect of solidarity which is based upon division of labour and the consequent necessity of relying upon the co-operation of others for the satisfaction of our wants. The Greek writers had caught a glimpse of this interdependence many centuries before the brilliant exposition of Adam Smith was given to the world.
All the manifold aspects of the doctrine, whether biological, sociological, moral, religious, legal, or economic, were obviously matters of common knowledge to the writers of antiquity. But each phase of the subject seemed isolated from the rest, and it was not until the middle of the nineteenth century that it dawned upon thinkers that there was possibly something like unity underlying this apparent diversity. It has already been impressed upon us that Pierre Leroux and a few of the disciples of Fourier, as well as Bastiat, had realised something of the value of the doctrine of solidarity and of the appropriateness of the term. But it was reserved for Auguste Comte to appreciate its full possibilities. “The new philosophy, viewed as a whole, emphasises the intimacy that exists between the individual and the group in their different relations, so that the conception of social solidarity extending throughout time and embracing the whole of humanity has become a fairly familiar idea.”[1252]
It is necessary, however, to inquire somewhat more closely into the success of the new doctrine in holding the attention both of the public and of economists. It is possible that the seed would have borne little fruit but for the presence of extraneous circumstances which helped to impress the public with a sense of the importance of these new theories.
Nothing has left a deeper impression upon the public or afforded a better illustration of the infinite possibilities of the new doctrine than the study of bacteriology. The prevalence of certain contagious maladies or epidemics had been too terribly prominent in the history of the human race to require any confirmation; but it was something to learn that the most serious diseases and maladies of all kinds were communicated from man to man by means of invisible bacilli. It was now realised that men who were supposed to be dying a natural death were in reality being slowly murdered. It was with something like horror that men learned that the consumptive, the hero of a hundred sentimental tales, every day expectorated sufficient germs to depopulate a whole town. Such “pathological” solidarity is being more closely interwoven every day by the ever-increasing multiplicity and rapidity of the means of communication. The slow caravan journey across the desert was much more likely to destroy the vitality of the bacilli picked up at Mecca than the much more rapid railway journey of the future, which will speed the pilgrim across the sandy wastes in a few hours. The traveller of former days, who went either afoot or on horseback, ran less risk of infection than his descendant of to-day, who perhaps only spends a few hours in the metropolis.
Sociology has also brought its contingent of facts and theories.[1253] The sociologist stakes his reputation upon being able to prove that the fable of the body and its members is no fable at all, but a literal transcription of actual facts, and that the union existing between various members of the social body is as intimate as that which exists between the different parts of the same organism. Such is the fullness and minuteness with which the analogy has been pushed even into obscure points of anatomical detail that it is difficult not to smile at the naÏvetÉ of its authors. It is pointed out that so close is the resemblance between the respective functions in the two cases that the term “circulation” does duty in both spheres, and a comparison is instituted between nutrition and production, reproduction and colonisation, and accumulation of fat and capitalism. In Florence during the Middle Ages the bourgeois were spoken of as the fat people, the workers as the small people. The organs also are very similar. Arteries and veins have their counterpart in the railway system, with its network of “up” and “down” lines. The nervous system of the one becomes the telegraphic system of the other, with its rapid communication of news and sensations. The brain becomes the seat of government, the heart is the bank; and between the two, both in nature and in society, there is a most intimate connection. Even the white corpuscles have a prototype in the police force, whose duty is to rush to the seat of disorder and to attempt to crush it immediately.
The sociological analogy, ingenious rather than scientific, did not have a very long vogue.[1254] But it has at least supplied a few conclusions which are thoroughly well established, and which serve as the basis of the solidarist doctrine. Among these we may mention the following:
(a) That solidarity in the sense of the mutual dependence of members of the same body is a characteristic of all life. Inorganic bodies are incomplete simply because they are mere aggregates. Death is nothing but the dissolution of the mysterious links which bind together the various parts of the living organism, with the result that it relapses into the state of a corpse, in which the various elements become indifferent to the presence of one another and are dissipated through space, to enter into new combinations at the further call of nature.
(b) That solidarity becomes more perfect and intimate with every rise in the biological scale. Completely homogeneous organisms scarcely differ from simple aggregates. They may be cut into sections or have a member removed without suffering much damage. The section cut off will become the centre of independent existence and the amputated limb will grow again. In the case of some organisms of this kind reproduction takes the form of voluntary or spontaneous segmentation. But in the case of the higher animals the removal of a single organ sometimes involves the death of the whole organism, and almost always imperils the existence of some others.
(c) That a growing differentiation of the parts makes for the greater solidarity of the whole. Where every organ is exactly alike each is generally complete in itself. But where they are different each is just the complement of the other, and none can move or exist independently of the rest.
One has only to think of the treatment meted out to the innovator by primitive tribes to realise the tremendous solidarity of savage society. The “boycotting” familiar in civilised countries provides a similar example.
Political economy, in addition to an unrivalled exposition of division of labour (which, as we have seen, was not unknown in classical times), has adduced several other incidental proofs of solidarity, such as bank failures in London or Paris and short time in the diamond or automobile industry as the result of a crisis in New York or an indifferent rice harvest in India. To take a simpler case, consider how easy it would be for the secretary of an electrical engineers’ union to plunge whole cities into darkness. The general strike, the latest bugbear of the bourgeoisie, owes its very existence to the growing sense of solidarity among working men. A sufficient number of workmen have only to make up their minds to remain idle and society has either to give way to their demands or perish.
Add to this the remarkable development which has taken place in the spreading of news and the perfecting of telegraphic communication, by which daily and even hourly men of all nations are swayed with feelings of sorrow or joy at the mere recital of some startling incident which formerly would have influenced but a very small number of people.[1255] Such agencies are not unworthy of comparison with those subtle human sympathies which are known by the name of spiritualism or telepathy. Thus from every side, from the limbo of occultism as well as from the full daylight of everyday life, the presence of numberless facts goes to show that each for all and all for each is not a mere maxim or counsel of perfection, but a stern, practical fact. The good or bad fortune of others involves our own well-being or misfortune. The ego, as someone has said, is a social product. These are some of the founts from which the stream of solidarism take its rise.
But that is not all. The doctrine of solidarity had the good fortune to appear just when people were becoming suspicious of individualist Liberalism, though unwilling to commit themselves either to collectivism or State Socialism.
In France especially a new political party in process of formation was on the look-out for a cry. The new creed which it desired must needs be of the nature of a via media between economic Liberalism on the one hand and socialism on the other. It must repudiate laissez-faire equally with the socialisation of individual property; it must hold fast to the doctrine of the rights of man and the claims of the individual while recognising the wisdom of imposing restrictions upon the exercise of those rights in the interests of the whole community. This was the party which called itself Radical then, but now prefers to be known as the Radical-Socialist party. German State Socialism as expounded about the same time was closely akin to it. But the German conception of the State as something entirely above party was an idea that was not so easily grasped in France as in Prussia. History in the two countries had not emphasised the same truths. Solidarism, so to speak, is State Socialism in a French garb, but possessed of somewhat better grace in that it does not necessarily imply the coercive intervention of the State, but shows considerable respect for individual liberties.[1256]
The new word performed one final service by usurping the functions of the term “charity,” which no one was anxious to retain because of its religious connection. The other term, “fraternity,” which had done duty since the Revolution of 1848, was somewhat antiquated by this time, and charged with a false kind of sentimentalism. The word “solidarity,” on the contrary, has an imposing, scientific appearance without a trace of ideology. Henceforth every sacrifice which is demanded in the interests of others, whether grants to friendly societies or workmen’s associations, cheap dwellings, workmen’s pensions, or even parish allowances, is claimed, not in the interests of charity, but of solidarity. And whenever such demand is made the approved formula is always used—it is not a work of charity, but of solidarity, for charity degradeth whereas solidarity lifteth up.
II: THE SOLIDARIST THESIS
The current is seldom very clear when the tributaries are numerous, and the stream must deposit its sediment before it becomes limpid. So here much greater precision was needed if the doctrine was ever to become general in its scope or even popular in its appeal.
M. LÉon Bourgeois, one of the leaders of the Radical-Socialist party, to his eternal credit attempted some such clarification by employing the term “solidarity,” hitherto so vaguely metaphysical, in a strictly legal fashion to designate a kind of quasi-contract. Quite a sensation was caused by M. Bourgeois’s work—a result due alike to the prominent position of the author and the opportune moment at which the book appeared. The greatest enthusiasm was shown for the new doctrine, especially in the universities and among the teachers in 100,000 elementary schools. An equally warm welcome was extended to it in democratic circles, where the desire for some kind of lay morality had by this time become very strong. It becomes necessary, accordingly, to give a more detailed analysis of the theory than was possible within the compass of the small volume in which it was first expounded.[1257]
In the first place it must be noted that the doctrine connotes something more than the mere application or extension of the idea of natural solidarity to the social or moral order. On the contrary, it is an attempt to remove some of the anomalies of natural solidarity. A firm belief in the injustice of natural solidarity, or at least a conviction that things are so adjusted that some individuals obtain advantages which they by no means deserve while others are burdened with disadvantages which are none of their seeking, lies at the root of the doctrine. There is a demand for intervention in order that those who have benefited by the accidents of natural solidarity should divide the spoils with those who have been less fortunate in drawing prizes in the lottery of life. It is for Justice to restore the balance and correct the abnormalities which a fickle sister has created. Just as it has been seen that man may utilise the forces of nature, against which he formerly was wont to struggle, to further his own ends, so solidarity puts forth a claim for the co-operation of Justice to correct the anomalies begotten of brute strength, believing that only in this way is real advance possible or any kind of improvement even remotely attainable.
Natural solidarity[1258] tells us that as a result of the division of labour, of the influence of heredity, and of a thousand other causes which have just been described, every man owes either to his forbears or his contemporaries the best part of what he has, and even of what he himself is. As Auguste Comte has put it, “We are born burdened with all manner of social obligations.” Nor is it an uncommon thing to meet with the word “debt” or “obligation” in the articles of the French Constitution. In the Constitution of 1793, for example, the duty of public assistance is spoken of as a sacred debt. But the term was loosely employed in the sense of noblesse oblige or richesse oblige, every individual being left free to carry out the obligation as best he could in accordance with the dictates of his own conscience. It is necessary, however, to transform the duty into a real debt, to give it a legal status, and when not voluntarily performed a legal sanction as well. If we are anxious to know exactly how this is to be done we have only to turn to Articles 1371-81 of the Civil Code, where in the chapter dealing with quasi-contracts we shall come across a section headed “Of Non-conventional Contracts.”
The title would seem to imply the validity of debts not explicitly contracted—that is to say, the existence of obligations which have not involved any volitional undertaking on the part of either party concerned. The first case, that of injury inflicted upon others, whether wilfully or not, is referred to as quasi-misdemeanour, and other instances mentioned in the section are spoken of as quasi-contracts. Illustrations, which are plentiful enough, include payments made when not really due, attention to the business of another without any definite mandate authorising such interference, the obligation of the inheritor of property to pay off debts incurred by the previous owner, the recognition of the common interest which people living in the same neighbourhood possess, and which also exists between those who own property and those who lease it, between those who use it and those who inherit it.
Wherever anything of the nature of a quasi-contract exists we may be tolerably certain that it is the product of de facto or natural solidarity. Such solidarity may take its rise in the mere fact of propinquity or the mere feeling of neighbourliness; but more often than not it involves a measure of control over the lives of others, which is one of the outstanding features of a rÉgime of division of labour. Then follow the familiar phenomena of fortunes amassed to the detriment of others through the acquisition of unearned increment and the operation of the laws of inheritance—the source of so many inequalities. Nor must we forget the prejudicial effect of quasi-misdemeanour upon the fortunes of others. The result is that the whole of society seems built, if not upon an original explicit contract, as Rousseau imagined, at least upon a quasi-contract; and seeing that this quasi-contract receives the tacit submission of the parties concerned, there is no reason why it should not be legally binding as well.
Now the existence of a debt implies that someone must pay it, and the next question is to determine who that someone ought to be.
Obviously it can only be those who have benefited by the existence of natural solidarity—all those who have amassed a fortune, but whose fortune would be still to make but for the co-operation of a thousand collaborators, both past and present. Such individuals have already drawn more than their share and have a balance to make up on the debit account. This debt should certainly be paid. It is all the better if it is done voluntarily, as an act of liberality arising out of goodness of heart—quia bonus, as the Gospel narrative puts it, of the rich good man. But this is hardly probable. Most people will pay just when they are obliged to; but such people have no right to consider themselves free, and no claim to the free disposal of their goods until they have acquitted themselves honourably.[1259] Individual property will be respected and free when every social debt which it involves has been adequately discharged, and not before then.[1260] Until this is done it is useless to speak of the existence of competition.
The next question is to determine who is to receive payment. Payment ought to be made to those who, instead of benefiting by the existence of natural solidarity, have suffered loss through its operation—the disinherited, as they are rightly called.[1261] All those who have not received a fair share of the total wealth produced by the co-operation of all naturally find themselves in the position of creditors. It is not easy to name them, perhaps, but the State can reach them a helping hand in a thousand different ways. State action of this kind was formerly spoken of as public assistance; nowadays it is termed solidarity or mutual insurance.
The payment may take the form either of a voluntary contribution to help some solidarist effort or other, or an obligatory contribution levied by the State. Some advocate progressive taxation, for if it be true that profits tend to grow progressively in proportion as an increase in the variety and strength of the means of production takes place, why not a progressive tax as well?[1262] Besides, the tax would be of a semi-sacred character, because it would mean the discharging of an important social debt. Nor is there anything very extravagant in the demand that the State should see that everyone makes a contribution in proportion to his ability, seeing that the natural function of the State is to be the guardian of contracts.[1263]
It is still more difficult to assess the rate of payment. The conditions under which payment would be made, says M. Bourgeois, would be such as the associates themselves would have adopted had they been free to discuss the terms of their engagement. In other words, everything must be regulated as if society were the result of an express convention, or rather of a retroactive contract mutually agreed upon. The difficulty is to determine the conditions which individual associates would demand as the price of their adhesion to the terms of the contract. We shall have to imagine what they would demand were they able to make fresh terms.
But we are not much farther ahead after all, for the individual himself knows nothing at all about it. Renouncing the attempt to solve the insoluble, one has to fix some kind of minimum claim which the disinherited may reasonably expect to see fulfilled. Such a minimum claim would be a guarantee against the ordinary risks of life. Society would become a kind of association for mutual insurance, with the good and bad fortune spread out equally over everybody.[1264]
But a quasi-contract is something very different from this. Contracts and quasi-contracts are based upon the giving and receiving of equivalent values, do ut des, whereas mutual insurance is a kind of substitute for direct liability. A contract is essentially individualistic—mutualism is primarily socialistic.
This idea of a quasi-contract contributed not a little to the success of M. Bourgeois’s theory, but it makes no vital contribution to the doctrine itself, and he might very easily have omitted it altogether.[1265] It is nothing better than an artifice, almost a logomachy, invented for the express purpose of affording some kind of justification for demanding a legal contribution by treating it as an implicit or retroactive contract. It is more of a concession to individual liberty than anything else. A taxpayer grumbles at a tax which goes to provide pensions for the old, but it is pointed out to him that the contribution is owing from him in virtue not of an explicit agreement perhaps, but at least of a quasi-agreement.
But what useful purpose can be served by such ironical subterfuge? If it can be shown that owing to inferior moral education the law must have the making of a conscience for those who have none, and must enforce a certain minimum of social duties which appear necessary for the preservation of life and the perpetuation of social amenities, what is that but a form of State Socialism? If it is pointed out, on the other hand, that moral progress consists in transforming debts into duties[1266] rather than vice versa, one readily realises that it is best to multiply the number of free institutions of a solidarist complexion, such as mutual aid and co-operative societies, trade unions, etc.
Another objective which the quasi-contract theory had in view was to supply the debtor with a kind of guarantee that nothing would be required of him beyond the exact equivalent of his debt.[1267] But, as we have already noted, it would be a somewhat illusory guarantee, because it is almost impossible to determine the amount of the debt in the first place. Since the amount of this debt is in some way to be fixed by law it may be well to begin with it.
Should the legislator find himself driven to accept M. Bourgeois’s valuation, the demands made upon the taxpayer will not be so exorbitant after all. The whole mass of obligations is summed up under three heads:
1. Free education for all classes of the community. Intellectual capital more than any other kind of capital is a collective good, and should never be other than common property, upon which every one may draw whenever he wishes. A necessary corollary would be a shorter working day.
2. A minimum of the means of existence for everybody. It is difficult to imagine a retroactive contract which refuses to grant men the right to live. Regarded in this light, the “guarantism” of Sismondi and Fourier, the “right to work” of Louis Blanc and ConsidÉrant, gain new significance and throb with fresh vitality.
3. Insurance against the risks of life, which, being fortuitous, are escaped by none. We know the promptness with which the feeling of kinship is aroused whenever one of these accidents happens on a scale somewhat larger than usual and assumes the proportions of a catastrophe. Why should it be otherwise when a single individual falls a victim to the fickleness of fate?
If M. Bourgeois has given his theory a distinctly politico-legal bias, M. Durkheim has taken good care to approach the question from the standpoint of moralist and sociologist.
M. Durkheim draws a distinction between two kinds of solidarities.
The first of these, which he regards as a quite inferior type, depends upon external resemblances, and is of a purely mechanical character, like the cohesion of atoms in a physical body. The other, which consists of a union of dissimilars, is the result of division of labour, and of such is the union between the various members of the human body. Durkheim regards this kind of unity as of immense significance, not so much because of its economic consequence as of its important moral results, “which might even supply the basis of a new moral order.” Seeing that individuals really follow divergent paths, the struggle for existence cannot be quite so keen as it is generally supposed to be,[1268] and this differentiation between the individual and the mass enables the former to dissociate himself from the collective conscience. Durkheim’s desire was to see the new ethic developed by the professional associations; hence the important rÔle which trade unionism holds in his philosophy.
Without disputing the validity of the distinction thus made, we may be allowed to question the advisability of treating one kind of solidarity with such contempt and of showing such enthusiasm for the other. Our hope is that the future lies with the former kind. For what is the object of evolution if it is not to make what seems similar really alike? The world is not merely marching in the direction of greater differentiation; it is also moving towards a deeper unity. This seems a well-established fact, at least so far as the physical world is concerned. Mountains are brought low and the hollow places filled. Heat is dissipated throughout space, causing minute gradations of temperature, and the establishment of a kind of final equilibrium.[1269] The same law applies to human beings. Differences of caste, of rank, of manners and customs, of language and measurements, are everywhere being obliterated. And it seems by this time a tolerably well-established fact that the wars of the past were wars between strangers—strangers in race or religion, in culture or education—and consequently it was between people who were dissimilar that they appeared most violent. Therefore the march towards unity also represents a movement in the direction of peace.[1270]
Such a conception of solidarity seems more akin to the ideal which we have formed respecting it, and has by far the greatest moral value; for if I am to be responsible for the evil that has befallen another, or to be considered an accomplice in the evil which he has done, that can only be just in proportion to the extent to which that other is also myself.[1271] The practical result will be a preference for such modes of association as will group men together according to some general characteristic—a co-operative association rather than a trade union; for while the interest of the latter is in opposition both to that of the producer and that of the public, the method of association in the former case is the most general imaginable, for everyone at some time or other must be regarded as a consumer.
III: THE PRACTICAL APPLICATION OF SOLIDARIST DOCTRINES[1272]
There is no such thing as a Solidarist school in the sense in which we speak of a Historical, a Liberal, or a Marxian school. Solidarity is a banner borne aloft by more than one school, and a philosophy that serves to justify aims that are occasionally divergent. As we have already had occasion to point out, the solidarists are more of a political party than a doctrinal school, and their best work has been done in association with the Radical-Socialist party. Behind them is the State Socialist or “interventionist” school. It has been suggested that the social legislation of the last twenty years, such as the regulations governing the conditions of labour, factory and general hygiene, insurance against accidents and old age, State aid for the aged and the disabled,[1273] the establishment of societies for mutual credit, rural banks and cheap cottages, and school clinics, all of which are the direct outcome of preaching solidarity, as well as the grants in aid of these objects which are paid out of the progressive taxation levied upon inherited wealth or extraordinary incomes of such as have plucked the fruit from the tree of civilisation to the deprivation of those who caused that fruit to grow, should be known as “the laws of social solidarity.”
Nor are workmen the only class who are likely to benefit by the adoption of this principle. The Protectionist or Nationalist party claims to be the party of solidarity, as well as the mutualists, who employ the term oftener than anyone else. When the taxpayer complains about the taxes which he has to pay in order to grant a bounty to certain proprietors or manufacturers, and the consumer grumbles because the levying of import duties results in increasing his cost of living, the reply is that the spirit of solidarity demands that preference should be given to their own kith and kin.[1274]
Fiscal reform, with its twofold attribute of a progressive tax at one end of the scale and total exemption at the other, also claims to be solidarist. Progressive taxation is justified on the ground that those who have made their fortunes are the debtors of society, while exemption at the other end is only fair, seeing that the disinherited have nothing to give, but have already a strong claim upon society.
However closely akin to State Socialism practical solidarism may appear, the fact that the latter may achieve its results merely by means of associationism is sufficient to distinguish it from the former. The result is that it has given quite a fresh impetus to the associative movement. Syndicalists, mutualists, and co-operators vie with one another in their anxiety to swear allegiance to the principle of free solidarism as distinct from the forced solidarism of the State Socialists.[1275] It is not that they fail to recognise the necessity for the latter and its superiority over free competition, but on moral grounds they think that such forced solidarism is even inferior to competition. It is imperative, however, that we should make some distinction between such heterogeneous elements as enter into the composition of the solidarist party.
The syndicalists, who come first, will hear of nothing except trade unionism, which is to become the basis of a new economic organisation and a new kind of ethics. The sense of solidarity is in this case very strong, because the syndicat poses as the sworn foe of the bourgeoisie. Nothing develops this sense like a struggle, and the struggle becomes a means of discipline. The attempts made by the trade unionists to enforce this solidarity, not only upon their own members, but also upon workmen who are unwilling to enrol themselves as members of the union, the antagonism shown for the jaunes, and the advent of the solidarist or sympathetic strike, constitute one of the most interesting aspects of the syndicalist movement.
Next came the mutualists, who are loudest and most persistent in their appeal to solidarity.[1276] It is not difficult to understand this when we realise the battle which they wage against the ills of life—invalidity, old age, poverty, and death. It is just here that men most feel the need of sticking together. But if we are to judge by the sacrifices which they make, the sense of solidarity among the mutualists themselves is not very great. They are loud in their demands that the State or the commune, or even voluntary subscribers, should complete what they have begun,[1277] and that the State should delegate to them the task of establishing workmen’s pensions and of dispensing State aid. Containing as they do some members of the middle classes as well as employees, they show no pronounced revolutionary leanings, nor have they even a plan of social reorganisation.
Co-operation, on account of its scope and the variety of its aims, has some claim to be regarded as in a measure a realisation of the ideals of solidarism. But co-operation presents a twofold aspect with different programmes and aims that are not always easily reconcilable. The oldest movements in which the fraternal tradition of 1848 may still be viewed in all its pristine vigour are the producers’ associations, of which we have already spoken. Their ideal is to emancipate the worker by setting up a kind of industrial republic, and they make a practical beginning with “guarantism,” which Sismondi expected the masters to give and which Fourier thought would naturally follow the establishment of the PhalanstÈre.[1278] But however rosy the prospects may be they can never affect more than a very small proportion of the working classes.
Distributive societies have met with a greater measure of success. Their membership is reckoned by the million, and in some towns in England, Germany, and Switzerland the members actually comprise the majority of the population. Such is the colossal magnitude of the “wholesale” that it might even alter the whole character of commercial organisation—that is, if we are to judge not merely by the record of its transactions, but also by the feeling of awe which it inspires in the minds of merchants in all countries, who are already claiming the protection of their respective Governments. Although the number of such societies is rapidly increasing in France, they have never had quite the same practical influence there, simply because they have been lacking in the true spirit of solidarity. Curiously enough, these French co-operators have formulated a most ambitious programme of social reform, which is wholly inspired by the experience of the Rochdale Pioneers.[1279]
The gospel of solidarity has even penetrated into the rural districts, and although the temperament of the peasant is strongly individualistic it is already beginning to bear fruit in the shape of numerous associations of various kinds. The most interesting of these is the mutual credit society, which implies collective responsibility for social debts.[1280]
This by no means exhausts the practical consequences of the solidarist ideal. One notable result which has already shown itself is a serious modification of the whole conception of the rights and attributes of private property. The old formula in which property was spoken of as a social trust rather than as a strictly individualistic right at the dominium ex jure Quiritium, but which until quite recently was nothing more than a mere metaphor, becomes a reality under the inspiration of this new doctrine of solidarity. Once it is realised that property is simply the result of the unconscious co-operation of a large number of causes, most of which are impersonal, the tendency will be to eliminate it altogether or to adapt it more and more to collective ends. M. Alfred FouillÉe,[1281] a French philosopher, aptly put this aspect of the question when he spoke of social co-proprietorship being grafted on to individual property.
The modifications introduced into the study of jurisprudence by emphasising its solidarist aspect are occasionally spoken of as “juridical socialism,” a term that is not very clear, to say the least. The jurists who have undertaken the task of applying this new principle to the study of jurisprudence have not merely adopted the quasi-contract theory as the basis of their work of reconstruction, but have also refused to recognise any absolute rights of property; in other words, they claim that the proprietor has other responsibilities besides the mere exercise of those rights (qui suo jure utitur neminem lÆdere videtur).
Instead of emphasising the new principle known as the “abuse of rights,” they prefer to claim the complete subjection of all private rights to the public weal. They point to a thousand instances in which a proprietor ought to be held responsible, though through no fault of his own, for the results following from the discharge of his economic duties.[1282] The existence of such a thing as an acquired right is also denied, chiefly on the ground that fictitious rights of this kind bar the way to progress by setting up a claim for indemnity.[1283]
IV: CRITICISM
Notwithstanding the popularity of the term “solidarity” and the numerous attempts made to give effect to the doctrine of which we have just given a summary account, it would be a mistake to imagine that the theory has met with sympathy everywhere. On the contrary, it has been subjected to the liveliest criticism, especially by the Liberal economists.
It is not that the Liberals deny the existence of solidarity or disapprove of the results which follow from its operation. The discovery of the law of solidarity under the familiar aspect of division of labour and exchange constitutes a part of their own title to fame, and extravagant were the eulogiums which they bestowed upon its working.
They do, however, hold firmly to the belief that economic solidarity is quite sufficient, and that it is also the best imaginable, despite the fact that it may be our duty to organise it afresh. Is it possible to improve upon a system of division of functions which gives everyone, every day of his life, the equivalent of the service which he has rendered to society? Bastiat in his fable The Blind and the Paralytic compares this distribution of social effort to an understanding between two such persons, whereby the blind does the walking and the maimed indicates the direction.
Members of this school are strongly of the opinion that it is quite enough to let this principle of each for all work itself out under the pressure of competition. And as a matter of fact is it not to the interest of the producer to consult the wants and tastes and even the fancies of the public? Altruism pursued in this spirit, as it well might be, manifests itself as an incessant desire to satisfy the wants of others, and even to live for others. It loses none of its force by becoming, instead of a mere ideal, a professional necessity which no producer can afford to neglect without running the risk of failure.[1284] And it is not only between producers and consumers, but also between capital and labour, that such solidarity exists. Neither can produce without the other, and the interest of both is to have as large a produce as possible. A similar kind of solidarity exists among nations. The richer our neighbours are the better chance of our finding an outlet for our products.
Moreover, none of these solidaritÉs but is essentially just, since everyone receives the exact equivalent of what he gives. What can the new doctrine of solidarity add to this, unless it be, perhaps, an element of pure parasitism?[1285]
For what is the essence of the new doctrine if it is not that those members of society who are possessed of a certain superiority of position, either material or intellectual (which is very often the result of the greater contribution which they have made to the material or intellectual capital of society), by a bold inversion of their material positions should find themselves treated as the debtors of such as have not succeeded? The natural result is that there are springing up everywhere in society whole classes who are living upon the claims of solidarity, just as their predecessors lived upon the claims of Christian charity. More daring than their forbears, they have none of the humility of the ordinary beggar, but boldly demand their due; not for the love of God, as was wont with the true mendicant, but in the name of some quasi-contract, with a policeman within hailing distance lest the debtor should not acquit himself in a sufficiently graceful fashion. Hence the swarm of pensioners and semi-invalids, of unemployed who patronise the relief works, and of victims of accidents more or less real, of parents who have their children reared for nothing, of manufacturers and proprietors who make a profit directly or indirectly out of the existence of public rights, and of public servants who in the name of professional solidarity trample national solidarity underfoot and sacrifice the interests both of taxpayer and consumer.
The economists have never held the doctrine that commutative justice by itself—mere do ut des—is enough. Adjacent to the realm of justice lies the domain of charity. But to annex this zone to the dominion of justice and to claim solidarity as a justification seems utter futility.
There is no avoiding this dilemma. Either they get the equivalent of what they give, which is the case under a system of free exchange, or they do not—in which case they must be either getting more or less. In other words, they are either parasites or destitutes—a case of exploitation or of charity.
It is further pointed out that the whole trend of evolution appears to give no countenance to this doctrine of solidarity, and that consequently it is of the nature of a retrograde movement. Even in the biological realm we come across what looks like a persistent effort to attain independence or autonomy, a struggle on the part of the individual to free himself from the trammels of his descent.[1286] Such must be the explanation of the recent heroic efforts to leave the earth and rise towards the skies, and the consequent exultation which the aviator feels when he finds that he has overcome the force of gravity and broken the last link which bound man to his mother earth. Turning to criminal law, we are met with similar considerations there. The collective responsibility of the whole family or tribe seemed quite just to the primitive mind, and the sons of the AtridÆ and the descendants of Adam suffered with hardly a murmur for the sins committed by their parents.[1287] But to us the doctrine is simply revolting. Whenever such penalties are demanded by nature we can only submit with the best grace that we can command. We are reluctantly bound to admit that the innocent does suffer for the faults of others—that the child perishes because the parent was a drunkard. But we, at any rate, regard such things as evil, and valiantly struggle against them. We are not much given to raising altars to Eumenides. When solidarity breeds contamination we seek to counteract it by a strict individualism that immunes. The innumerable fetters that had been riveted together by the old co-operative rÉgime were ruthlessly torn off by the French Revolution. Why attempt to forge new chains by giving to each individual a hypothetical claim upon his fellows?
The moralists in their turn have also raised objections. They want to know what new principle of morality solidarity professes to teach. When it has been shown that my neighbour’s illness may easily compass my own death, what new feeling will the mere proving of this beget in me? Will it be love? Is it not much more likely to reveal itself as a desire to keep him as far from me as possible—to get rid of him altogether like a plague-stricken rat, or at least to see that he is locked up in some sanatorium or other? I may perhaps be found more willing to contribute towards the upkeep of the sanatorium, but the dominant motive will be fear, or self-interest, if that word seems preferable.[1288]
Thus solidarity, while it does not seem to contain any new doctrine of love, tends to weaken and to suppress the sense of responsibility by treating society as a whole, or at least the social environment, as the source of our errors, our vices and crimes. Individual responsibility, however, is the very basis of morality.
Such are the criticisms preferred by individualist economists. It would be a mistake to imagine, however, that the socialists, the anarchists, or the syndicalists have treated the doctrine with any greater degree of indulgence. The proposal to reconcile masters and workmen, rich and poor, in a kind of silly, sentimental embrace is a menace to socialism and a denial of the principle of class war.[1289]
All such criticism, however, utterly fails to convince us. It may be well, perhaps, to get rid of the coercive element in the discharge of social debt, but that does not do away with the valuable contribution made by solidarity both to social economics and to ethics.
Solidarity by itself does not furnish a principle of moral conduct, since it is just a natural fact, and as such it is non-moral. Whenever we imagine that solidarity is something evil, that judgment in itself is a proof that we have had recourse to some criterion outside solidarity itself by which to judge of its good or evil features. It is quite possible also that the idea may be exploited for the profit of the egoist. If solidarity is nothing but a mere cord binding us together it may quite possibly happen that it will be used to exalt some people and to pull others down, and the number brought low may even exceed the number raised up. We need not be surprised if occasionally we find that instead of increasing the power of good we have extended the opportunity for evil. But we must speed the coming of these new powers in the hope that in the end good will triumph over evil. Solidarity by itself cannot furnish a rule of moral conduct to such as have none already; but, granting the existence of a moral principle, it matters not whether it be egoism or altruism, solidarity supplies us with a leverage of incomparable strength.
In short, it teaches us three important lessons:
1. It shows us that all the good which has happened to others has added to our own well-being, and that all the evil that has befallen them has done us harm, and that consequently we ought to encourage the one and discourage the other, so that a policy of indifferent abstention is no longer possible for any of us.
The mode of action prescribed may be frankly utilitarian, but there is an element of triumph in getting the egoist to forget himself and to remember others, even though it be but for a time. A heart that beats for others, though the reason perhaps be selfish, is a somewhat nobler heart. It is doubtful whether we can ever get pure altruism without some admixture of self-interest. The Gospel only asks that we should love our neighbour as ourselves. Solidarity makes a similar demand, neither more nor less, but undertakes to prove that the neighbour is really myself.
2. It shows us how the results of our actions return upon ourselves with their harvest of suffering or joy a thousand times increased. This gives it its character for solemnity and majesty which has made it such an exceedingly favourable instrument for moral education. To our care is entrusted the welfare of souls, and just as we are led to see that we never really had a right to say that this or that matter was no concern of ours, so we also find ourselves relieved of that other equally heinous maxim, namely, that certain matters concern ourselves alone. Far from weakening the sense of responsibility, as some writers maintain, it is obvious that it increases it indefinitely.
3. It is true that in a contrary fashion it renders us more indulgent of the faults of others, by showing how often we have been unconscious accomplices in their crime. Morally this is a gain, for it helps us to be more indulgent towards others, but more severe upon ourselves.
From the standpoint of sociological evolution we are confronted with the dissolution of many of the older forms of solidarity and with the emergence of new ones. What really takes place is an extension of the circle of solidarity through the family, the city, and the nation until it reaches humanity—such expansion being accompanied by a doubly fortunate result. On the one hand corporate egoism becomes so ennobled and extended that it includes the whole of humanity, with the result that the strife between antagonistic interests becomes less acute. The old argument from independence had already grown blunt in the struggle with division of labour. Degree of independence is not the sole measure of personality. The savage beneath his ancestral tree is independent, and so perhaps is Ibsen’s hero in revolt against society. The king on his throne, on the other hand, who never speaks except in the plural number, is always conscious of his dependence. But the savage because of his independence is powerless, whereas the king because of his dependence is very powerful. Solidarity, whether it be like the rope that binds the Alpine climber to his guide which may lead them both to the abyss, or like the patriotism that rivets the soldier’s gaze upon his country’s flag, cannot detract from individuality. If it be true, as was said just now, that the crystal is the earliest effort of the individual to render itself independent of its environment, we must never forget that it is also the earliest realisation of true solidarity in the form of association.
As to the argument of the economists that mere exchange is the only form of solidarity that is at all compatible with the demands of justice, all the schools whose fortunes we have followed in the course of this volume have declared against this view, not excepting even the Mathematical school, the latest offspring of the Classical tradition. Esau’s bargain with Jacob, the contracts between the Congo Company and the blacks, or between the entrepreneur and the home-worker, are irreproachable from a Hedonistic standpoint (see p. 540). But no one would consider such primitive exchanges, which, as Proudhon eloquently remarks, savour of retaliation—an eye for an eye and a tooth for a tooth—as evidence of the existence of solidarity.
Even if we conceived of exchange as a balance the two sides of which are in equilibrium, it is impossible to escape the conclusion that the contracting parties fare rather differently when they do not start on a footing of complete equality. There is always a Brennus ready to throw his sword into the scales.
It is only natural that we should ask ourselves what is to be done under such circumstances. Must we be content simply to resign ourselves to our fate? This seems inevitable if it be true, as the economists seem to suggest, that human relations depend entirely upon exchange and its derivatives—selling, lending, wage-earning, etc. But it is quite otherwise when these human relations are regarded as the outcome of association, whether professional, mutualist, or co-operative.[1290]
In this spirit the worker subscribes to his union with a view to increasing its strength. Undoubtedly he reckons upon getting a higher wage, but there is no necessary relation between his membership of the union and the eventual rise in wages which he expects. The mutualist supports his society in the hope that he may add to the general feeling of security. Undoubtedly in his case again he reckons upon the society paying his doctor should he fall ill, but scores of members pass through life without making any demand upon their society at all, contributing much more than they withdraw. In this way the good lives pay for the bad ones. The member of the co-operative society, in a similar fashion, is more concerned about a fuller satisfaction of his need than he is about the amount of profit that he can get out of it. In short, whereas under a competitive system each one tries to get rid of his neighbour, under a rÉgime of association everyone would try to make some use of him. The object of solidarity is to substitute “each for all” as a principle of action instead of “each for himself.”[1291] Every step taken in this direction, whether we wish it or no, implies a movement away from the rÉgime of exchange in the direction of solidarity.
CHAPTER IV: THE ANARCHISTS
The social creed of the anarchist is a curious fusion of Liberal and socialist doctrines. Its economic criticism of the State, its enthusiasm for individual initiative, as well as its conception of a spontaneous economic order, are features which it owes to Liberalism; while its hatred of private property and its theory of exploitation represent its borrowings from socialism.
Doctrinal fusions of this kind which seek to combine two extreme standpoints not infrequently outdo them both. Dunoyer, for example, was the extremest of Liberals, but he took great care to remind his readers of at least one function which none but the State could perform: no other authority, he thought, could ever undertake to provide security. True bourgeois of 1830 that he was, Dunoyer always considered that “order” was a prime social necessity.[1292] But, armed with the criticism of the socialists, the anarchists soon get rid of this last vestige of the State’s prerogative. In their opinion the security of which Dunoyer spoke merely meant the security of proprietors; “order” is only necessary for the defence of the possessors against the attack of the non-possessors. The socialists themselves (with the exception of Fourier, perhaps, whom the anarchists claim as one of themselves), however opposed to private property, were exceedingly anxious to retain considerable powers in the hands of the State, such as the superintendence of social production, for example. Armed this time with the criticism of the Liberal school, the anarchists experience no difficulty in demonstrating the economic and administrative incapacity of the State. “Liberty without socialism means privilege, and socialism without liberty means slavery and brutality”—so writes Bakunin.[1293]
It is only fitting that a few pages at the end of this book should be devoted to a doctrine that attempts to fuse the two great social currents that strove so valiantly for the upper hand in nineteenth-century history.
It is not our first acquaintance with anarchy, however. It has already been given a “local habitation and a name” by Proudhon, who is the real father of modern anarchism. This does not imply that similar doctrines may not be discovered in writings of a still earlier date, as in Godwin’s, for example. But such writers remained solitary exceptions,[1294] while the links connecting the anarchical teaching of Proudhon with the political and social anarchy of the last thirty years are easily traced. Not only is the similarity of ideas very striking, but their transmission from Proudhon to Bakunin, and thence to Kropotkin, Reclus, and Jean Grave, is by no means difficult to follow.
Alongside of the political and social anarchism which form the principal subject of this chapter there is also the philosophical and literary anarchism, whose predominant characteristic is an almost insane exaltation of the individual. The best known representative of this school, which hails from Germany, is Max Stirner, whose book entitled Der Einzige und sein Eigenthum appeared in 1844.[1295] The work was forgotten for a long time, although it enjoyed a striking success when it first appeared. Some twenty years ago, just when Nietzsche was beginning to win that literary renown which is so unmistakably his to-day, it was seen that in Stirner he had a precursor, although Stirner’s works probably remained quite unknown to Nietzsche himself, with the result that Stirner has since enjoyed posthumous fame as the earliest immoraliste. A few words only are necessary to show the difference between his doctrines and those of Proudhon, Bakunin, and Kropotkin.[1296]
I: STIRNER’S PHILOSOPHICAL ANARCHISM AND THE CULT OF THE INDIVIDUAL
Stirner’s book was written as the result of a wager. The nature of the circumstances and the character of the epoch that gave birth to it were briefly these. Stirner was a member of a group of young German Radicals and democrats whom Bruno Bauer had gathered round him in 1840. They drew their inspiration from Feuerbach, and accepted the more extreme views of the Hegelian philosophy. Their ideal was the absolute freedom of the human spirit, and in the sacred name of liberty they criticised everything that seemed in any way opposed to this ideal, whether nascent communism, dogmatic Christianity, or absolute government. The intellectual leaders of the German Revolution of 1848 were drawn from this group, but they were soon swept aside in the reaction of 1850. A few of them who were in the habit of meeting regularly in one of the Berlin restaurants assumed the name die Freien. Marx and Engels occasionally joined them, but soon left in disgust. Their joint pamphlet, which bears the ironical title of The Holy Family, is supposed to refer to Bauer and his friends. A few of the German Liberal economists, including Julius Faucher among others, paid occasional visits to the Hippel Restaurant. Max Stirner, who was one of the most faithful members and a most attentive listener, although it does not seem that he contributed much to the discussion, conceived the idea of preparing a surprise for his friends in the form of a book in which he attempted to prove that the criticism of the supercritics was itself in need of criticism.
The extreme Radicals who formed the majority of the group were still very strongly attached to a number of abstract ideas which to Stirner seemed little better than phantoms. Humanity, Society, the Pure, and the Good seemed so many extravagant abstractions; so many fetishes made with hands before whom men bow the knee and show as much reverence as ever the faithful have shown towards their God. Such abstractions, it seemed to him, possess about as much reality as the gods of Olympus or the ghosts that people the imagination of childhood. The only reality we know is the individual; there is no other. Every individual constitutes an independent original force, its only law its own personal interest, and the only limit to his development consists in whatever threatens that interest or weakens its force. Every man has a right to say, “I want to become all that it is within my power to become, and to have everything I am entitled to.”[1297] Bastiat had already expressed it as his opinion that there could be no conflict of legitimate rights, and Stirner declares that “every interest is legitimate provided only it is possible.” “The crouching tiger is within his rights when he springs at me; but so am I when I resist his attacks.” “Might is right, and there is no right without might.”[1298]
Granting that the individual is the only reality, all those collective unities that go by the name of the family, the State, society, or the nation, and all of which tend to limit his individuality by making the individual subservient to themselves, at once become meaningless. They are devoid of substance and reality.[1299] Whatever authority they possess has been ascribed to them by the individual. Mere creatures of the imagination, they lose every right as soon as I cease to recognise them, and it is only then that I become a really free man. “I have a right to overthrow every authority, whether of Jesus, Jehovah, or God, if I can. I have a right to commit a murder if I wish it—that is to say, unless I shun a crime as I would a disease. I decide the limits of my rights, for outside the ego there is nothing.… It may be that that nothing belongs to no one else; but that is somebody else’s affair, not mine. Self-defence is their own look-out.”[1300] The workers who complain of exploitation, the poor who are deprived of all property, have just one thing which they must do. They must recognise the right to property as inherent in themselves and take as much of it as they want. “The egoist’s method of solving the problem of poverty is not to say to the poor, ‘Just wait patiently until a board of guardians shall give you something in the name of the community,’ but ‘Lay your hands upon anything you want and take that.’ The earth belongs to him who knows how to get hold of it, and having got hold of it knows how to keep it. If he seizes it, not only has he the land, but he has the right to it as well.”[1301]
But what kind of a society would we have under such conditions? It would simply be a “Union of Egos,” each seeking his own and joining the association merely with a view to greater personal satisfaction. Present-day society dominates over the individual, making him its tool. The “Union of Egos”—for we cannot call it a society—would be simply a tool in the hand of the individual. No scruples would be felt by anyone leaving the union if he thought something was to be gained by such withdrawal. Every individual would just say to his neighbour, “I am not anxious to recognise you or to show you any respect. I simply want you to be of some service to me.”[1302] It would be a case of bellum omnium contra omnes, with occasional precarious alliances. But it would at least mean liberty for all.
Such strange, paradoxical doctrines are irrefutable if we accept Stirner’s postulates. But we must reject his whole point of view and dispute the stress laid upon the individual as the only reality, as well as his denial of the reality of society. Granting that the individual is the only reality, then society and the nation are mere abstractions created by man and removable at his pleasure. But that is just the mistake. The individual has no existence apart from society, nor has he any greater degree of reality. He is simply an element, not a separate entity. His existence or non-existence does not depend upon himself. Nor is society merely an idea. It is a natural fact. The individual may be quite as appropriately described as an abstraction or a mere phantom.
The fundamental difference between Stirner and the other anarchists who will engage our attention is just this recognition of the reality of the social fact which Stirner denies in toto. It also marks the cleavage between literary and political anarchism.[1303]
II: SOCIAL AND POLITICAL ANARCHISM AND THE CRITICISM OF AUTHORITY
Stirner spent his life between his study and the Hippel Restaurant, the rendezvous of his friends. Bakunin and Kropotkin are men of a different stamp who have risked their freedom, and even their lives, for the sake of the cause which they have at heart. It is true that the seed sown in the mind of the ignorant as the result of their teaching has often had most deplorable results, but no one can deny the quality of courage to either Kropotkin or Reclus, or withhold from them the title of greatness both of mind and character.
Bakunin was reared in much the same intellectual atmosphere as Stirner.[1304] By birth he belonged to the Russian nobility, and spent the earliest years of his life in the Russian army. In 1834, at the age of twenty, he resigned his commission in order to devote himself to the study of philosophy, and, like Proudhon, Stirner, and Marx, he came under the universal spell of Hegel. In 1840 he proceeded to Berlin, where he became acquainted with the school of young Radicals of whom we have already spoken. From 1844 to 1847 we find him in Paris, where he used to spend whole nights in discussion with Proudhon. Proudhon’s influence upon him is very marked, and one constantly meets with passages in the writings of the Russian anarchist which are nothing but paraphrases of ideas already put forward by Proudhon in the IdÉe gÉnÉrale de la RÉvolution au XIXe SiÈcle. The year 1848 revealed to the dilettante nobleman his true vocation, which he conceived to be that of a revolutionary. He successively took part in the risings at Prague and in the Saxon Revolution at Dresden. He was arrested and twice condemned to death, in Saxony and again in Austria, but was finally handed over to the Russian authorities, who imprisoned him in the fortress of St. Peter and St. Paul, where an attack of scurvy caused him to lose all his teeth. He was exiled to Siberia in 1857, but managed to escape in 1861. Making his way to London, he undertook the direction of a vigorous revolutionary campaign, which was carried on in Switzerland, Italy, and France. During the years 1870 and 1871 he successfully planned a popular rising at Lyons. Bernard Lazare has graphically described him as “a hirsute giant with an enormous head which seems larger than it really is because of the mass of bushy hair and untrimmed beard which surrounds it. He always sleeps rough, has no roof above him, and no homeland which he can call his own, and like an apostle is always prepared to set out on his sacred mission at any hour of the night or day.”
The most striking fact in his history was his rupture with Karl Marx at the last International Congress, held at The Hague in 1872. Bakunin joined the International in 1869. Disgusted with the pontifical tendencies of the General Council, which was entirely under the heel of Marx, he proposed a scheme of federal organisation under which each section would be left with considerable autonomy. The Jura Federation supported his proposals, and so did several of the French, Belgian, and Spanish delegates, as well as all the Italian. But he was expelled from the International by Marx’s own friends. The official rupture between Marxian socialism and anarchy, grown to considerable proportions since, dates from that very moment. That Hague congress marks also the end of the International. Marx soon afterwards transferred the centre of the administration to the United States, and no conference has been held since. Bakunin also retired from the struggle about the same time, but not before he had set up a new association at Geneva, composed of a few faithful friends. In 1876 Bakunin died at Berne.
It was in the region of the Jura, in the neighbourhood of NeuchÂtel, where Bakunin had still a few followers among the extremely individualistic but somewhat mystical population of those parts, that Kropotkin in the course of a short stay in the district in 1872 imbibed those anarchist ideas to the propagation of which he has so strenuously devoted his life.[1305] Although personally unacquainted with Bakunin, Kropotkin must be regarded as his direct descendant.
Prince Kropotkin is also a Russian aristocrat, and he, like his master, joined the army after a short period of study. He attracted public notice first of all as the author of several remarkable works dealing with natural history and geography, which showed him to be a confirmed disciple of Darwin. But science was by no means his only interest. By 1871 Hegelian influence was on the wane in Russia, and the more thoughtful of the younger generation turned their attention to democracy. The new watchword was, “Go, seek the people, live among them, educate them and win their confidence if you want to get rid of the yoke of autocracy.” Kropotkin caught the inspiration. He himself has told us how one evening after dinner at the Winter Palace he drove off in a cab, took off his fine clothes, and, putting on a cotton shirt instead of his silk one, and boots such as the peasants wore, hurried away to another quarter of the city and joined a number of working men whom he was trying to educate. But his propaganda proved short-lived, for one evening when he was leaving the headquarters of the Geographical Society, where he had just been reading a paper and had been offered the presidency of one of the sections, he was arrested on a charge of political conspiracy and imprisoned in the fortress of St. Peter and St. Paul. He managed to escape in 1876, and found refuge in England. Afterwards he was wrongfully condemned to three years’ imprisonment at Clairvaux on account of his supposed complicity in an anarchist outbreak which took place at Lyons in 1884. But there was something extraordinary about a prisoner who could get the libraries of Ernest Renan and the Paris Academy of Sciences placed at his disposal during his term of imprisonment in order to enable him to pursue his scientific investigations. During his previous imprisonment in Russia the Geographical Society of St. Petersburg had extended him a similar privilege. Kropotkin has since lived in England.
The best known French anarchists, ÉlisÉe Reclus, the geographer, and Jean Grave, simply reproduce Kropotkin’s ideas, with an occasional admixture of Bakunin’s or Proudhon’s.[1306]
Our concern is with the expression of anarchist ideas as we find them in the best known writers of the school. Consequently we must pass over the very striking but immature formulÆ which are not infrequently to be met with in the works of more obscure writers.[1307]
Here again the distinguishing features are the emphasis laid upon individual rights and a passion for the free and full development of personality, which, as we have seen, was the keynote of Stirner’s system. “Obedience means abdication,” declares ÉlisÉe Reclus.[1308] “Mankind’s subjection will continue just so long as it is tolerated. I am ashamed of my fellow-men,” writes Proudhon in 1850 from his prison at Doullens.[1309] “My liberty,” says Bakunin, “or what comes to the same thing, my honour as a man, consists in obeying no other individual and in performing only just those acts that carry conviction to me.”[1310] Jean Grave declares that society can impose “no limitations upon the individual save such as are derived from the natural conditions under which he lives.”[1311]
But this cult of the individual which is present everywhere in anarchist literature rests upon a conception which is the direct antithesis of Stirner’s. To Stirner every man was a unique being whose will was his only law. The anarchists who follow Proudhon, on the other hand, regard man as a specimen of humanity, i.e. of something superior to the individual. “What I respect in my neighbour is his manhood,”[1312] wrote Proudhon. It is this humanity or manhood that the anarchist would have us respect by respecting his liberty, for, as Bakunin declares, “liberty is the supreme aim of all human development.”[1313] It is not the triumph of the egoist but the triumph of humanity in the individual that the anarchists would seek, and so they claim liberty not merely for themselves but for all men. Far from wishing to be served by their fellow-men, as Stirner desired, they want equal respect shown for human dignity wherever found. “Treat others as you would that others should treat you under similar circumstances,”[1314] writes Kropotkin, employing Kantian and even Christian phraseology. Bakunin, a faithful disciple of Proudhon’s, considered that “all morality is founded on human respect, that is to say, upon the recognition of the humanity, of the human rights and worth in all men, of whatever race or colour, degree of intellectual or moral development”;[1315] and he adds that “the individual can only become free when every other individual is free. Liberty is not an isolated fact. It is the outcome of mutual goodwill; a principle not of exclusion, but of inclusion, the liberty of each individual being simply the reflection of his humanity or of his rights as a human being in the conscience of every free man, his brother and equal.”[1316] This idea of humanity, which the latest anarchists owe to Proudhon, is not simply foreign to Stirner, but is just one of those phantoms which Stirner was particularly anxious to waylay.[1317]
Along with this extravagant worship of individual liberty goes a hatred of all authority. Here the political anarchists join hands with Stirner. For the exercise of authority of one man over another means the exploitation of one man by another and a denial of his humanity. The State is the summation of all authority, and the full force of anarchist hatred is focused upon the State. No human relation is too sacred for State intervention, no citizen but is liable to have his conduct minutely prescribed by law. There are officers to apply the law, armies to enforce it, lecturers to interpret it, priests to inculcate respect for it, and jurists to expound it and to justify everybody. Thus has the State become the agent par excellence of all exploitation and oppression.[1318] It is the one adversary, in the opinion of every anarchist—“the sum total of all that negates the liberty of its members.” “It is the grave where every trace of individuality is sacrificed and buried.” Elsewhere, “it is a flagrant negation of humanity.”[1319] Bakunin, who in this matter as well as in many others is a follower of Bastiat, speaks of it as “the visible incarnation of infuriated force.” That is enough to label it for ever with the evil things of life, for the aim of humanity is liberty, but force is “a permanent negation of liberty.”[1320]
A necessary agent of oppression, government always and inevitably becomes the agent of corruption. It contaminates everything that comes into contact with it, and the first to show signs of such contamination are its own representatives. “The best man, whoever that may be, whatever degree of intelligence, magnanimity, and purity of heart he may have, is unavoidably corrupted by his trade. The person who enjoys any privilege, whether political or economic, is intellectually and morally a depraved character.” So Bakunin thought,[1321] and ElisÉe Reclus writes in a similar strain. “Every tree in nature bears its own peculiar fruit, and government, whatever be the form it take, always results in caprice or tyranny, in misery, villainy, murder, and evil.”[1322] The governing classes are inevitably demoralised, but so are the governed, and for just the same reasons. Government is a worker of evil even when it would do good, for “the good whenever it is enjoined becomes evil. Liberty, morality, real human dignity consists in this, that man should do what is good not because he is told to do it, but simply because he thinks that it really is the best that he can ever wish or desire.”[1323]
It matters little what form government takes. Absolute or constitutional monarchy, democratic or aristocratic republicanism, government on the basis of a universal or a restricted suffrage, are all much the same, for they all presuppose a State of some sort. Authority, whether of a despot or of the majority of the community, is none the less authority, and implies the exercise of a will other than the individual’s own. The great error committed by all the revolutions of the past has been this: one government has been turned out, but only to have its place usurped by another. The only true revolution will be that which will get rid of government itself—the fount and origin of all authority.
Still closer scrutiny reveals the interesting fact that the State, which is naturally oppressive, gradually becomes employed as the instrument for the subjugation of the weak by the strong, the poor by the rich. It was Adam Smith who ventured to declare that “civil government … is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.”[1324] Pages of anarchist literature simply consist of elaborate paraphrases of this remark of Smith’s.
Kropotkin thinks that every law must belong to one or other of three categories. To the first category belong all laws concerned with the security of the individual; to the second all laws concerned with the protection of government; and to the third all those enactments where the chief object in view is the inviolability of private property.[1325] In the opinion of the anarchist, all laws might more correctly be placed under the last category only, for whenever the safety of the individual is in any way threatened it is generally the result of some inequality of fortune.[1326] Indirectly, that is to say, the attack is directed against property. The real function of government is to defend property, and every law which is instrumental in protecting property is also effective in shielding the institution of government from attack.
Property itself is an organisation which enables a small minority of proprietors to exploit and to hold in perpetual slavery the masses of the people. In this instance the anarchists have not made any weighty contribution of their own, but have merely adopted the criticisms of the socialists.[1327] Proceeding in the usual fashion, they point to the miserable wages which are usually paid to the workers, and show how the masters always manage to reserve all the leisure, all the joys of existence, all the culture and other benefits of civilisation for themselves. Private property is of the essence of privilege—the parent of every other kind of privilege. And the State becomes simply the bulwark of privilege. “Exploitation and government,” says Bakunin, “are correlative terms indispensable to political life of every kind. Exploitation supplies the means as well as the foundation upon which government is raised, and the aim which it follows, which is merely to legalise and defend further exploitation.”[1328] “Experience teaches us,” says Proudhon,[1329] “that government everywhere, however popular at first, has always been on the side of the rich and the educated as against the poor and ignorant masses.”[1330]
Whether the extinction of private property, which would free the worker from the danger of being exploited by the rich, would also render the State unnecessary is a question upon which the anarchists are not agreed. Proudhon, we remember, had hoped by means of the Exchange Bank to reduce the right of property to mere possession. Bakunin, on the contrary, is under the spell of the Marxians, and, like a true collectivist, he thinks that all the instruments of production, including land, should be possessed by the community. Such instruments should always be at the disposal of groups of working men expert in the details of agriculture or industrial production, and such workers should be paid according to their labour.[1331] Kropotkin, on the other hand, regards communism as the ideal and looks upon the distinction drawn by the collectivist between instruments of production and objects of consumption as utterly futile. Food, clothing, and fuel are quite as necessary for production as machinery or tools, and nothing is gained by emphasising the distinction between them. Social resources of every kind should be freely placed at the disposal of the workers.[1332]
But the State and the institution of private property by no means exhausts the list of tyrannies. Individual liberty is as little compatible with irrevocable vows—that is, with a present promise which binds for ever the will of man—as it is with submission to external authority. The present marriage law, for example, violates both these conditions. Marriage ought to be a free union. A contract freely entered upon and deliberately fulfilled is the only form of marriage that is compatible with the true dignity and equality of both man and woman.[1333] A free and not a legal contract is the only form of engagement which the anarchists recognise. Free contract between man and wife, between an individual and an association, between different associations pursuing the same task, between one commune and another, or between a commune and a whole country. But such engagements must always be revocable, otherwise they would merely constitute another link in the chain that has shackled humanity. Every contract that is not voluntarily and frequently renewed becomes tyrannical and oppressive and constitutes a standing menace to human liberty. “Because I was a fool yesterday, must I remain one all my life?”[1334] asks Stirner; and on this point Bakunin, Kropotkin, Reclus, Jean Grave, and even Proudhon are agreed.
To regard their social philosophy as nothing but pure caprice because of the wonderful faith which they had in their fellow-men would, however, be a great mistake.
Notwithstanding the merciless criticism of authority of every kind, there was still left one autocrat, of a purely abstract character perhaps, but none the less imperious in its demands. This was the authority of reason or of science. The sovereignty of reason was one of the essential features of Proudhon’s anarchist society.[1335] What Proudhon calls reason Bakunin refers to as science, but his obeisance is not a whit less devotional. “We recognise,” says he, “the absolute authority of science and the futility of contending with natural law. No liberty is possible for man unless he recognise this and seek to turn this law to his own advantage. No one except a fool or a theologian, or perhaps a metaphysician, a jurist, or a bourgeois economist, would revolt against the mathematical law which declares that 2 + 2 = 4.” The utmost that a man can claim in this matter is that “he obeys the laws of nature because he himself has come to regard them as necessary, and not because they have been imposed upon him by some external authority.”[1336]
Not only does Bakunin bow the knee to science, but he also swears allegiance to technical or scientific skill. “In the matter of boots I am willing to accept the authority of the shoemaker; of clothes, the opinion of the tailor; if it is a house, a canal, or a railway, I consult the architect and the engineer. What I respect is not their office but their science, not the man but his knowledge. I cannot, however, allow any one of them to impose upon me, be he shoemaker, tailor, architect, or savant. I listen to them willingly and with all the respect which their intelligence, character, or knowledge deserves, but always reserving my undisputed right of criticism and control.”[1337] Bakunin has no doubt that most men willingly and spontaneously acknowledge the natural authority of science. He agrees with Descartes and employs almost identical terms[1338] when he declares that “common sense is one of the commonest things in the world.” But common sense simply means “the totality of the generally recognised laws of nature.” He shares with the Physiocrats a belief in their obviousness, and invokes their authority whenever he makes a vow. He is also anxious to make them known and acceptable of all men through the instrumentality of a general system of popular education. The moment they are accepted by “the universal conscience of mankind the question of liberty will be completely solved.”[1339] Let us again note how redolent all this is of the rationalistic optimism of the eighteenth century, and how closely Liberals and anarchists resemble one another in their absolute faith in the “sweet reasonableness” of mankind. Bakunin only differs from the Physiocrats in his hatred of the despot whom they had enthroned.
A society of free men, perfectly autonomous, each obeying only himself, but subservient to the authority of reason and science—such is the ideal which the anarchists propose, a preliminary consideration of its realisation being the overthrow of every established authority. “No God and no master,” says Jean Grave; “everyone obeying his own will.”[1340]
III: MUTUAL AID AND THE ANARCHIST CONCEPTION OF SOCIETY
At first sight it might seem that a conception of social existence which would raise every individual on a pedestal and proclaim the complete autonomy of each would speedily reduce society to a number of independent personalities. Every social tie removed, there would remain just a few individuals in juxtaposition, and society as a “collective being” would disappear.
But it would be a grievous mistake to conceive of the anarchist ideal in this light. There is no social doctrine where the words “solidarity” and “fraternity” more frequently recur. Individual happiness and social well-being are to them inseparable. Hobbes’ society, or Stirner’s, where the hand of everyone is against his brother, fill the anarchists with horror. To their mind that is a faithful picture of society as it exists to-day. In reality, however, man is a social being. The individual and society are correlative: it is impossible to imagine the one without thinking of the other.
No one has given more forcible expression to this truth than Bakunin; and this is possibly because no one ever had a keener sense of social solidarity. “Let us do justice once for all,” he remarks, “to the isolated or absolute individual of the idealists. But that individual is as much a fiction as that other Absolute—God.… Society, however, is prior to the individual, and will doubtless survive him, just as Nature will. Society, like Nature, is eternal; born of the womb of Nature, it will last as long as Nature herself.… Man becomes human and develops a conscience only when he realises his humanity in society; and even then he can only express himself through the collective action of society. Man can only be freed from the yoke of external nature through the collective or social effort of his fellow-men, who during their sojourn here have transformed the surface of the earth and made the further development of mankind possible. But freedom from the yoke of his own nature, from the tyranny of his own instincts, is only possible when the bodily senses are controlled by a well-trained, well-educated mind. Education and training are essentially social functions. Outside the bounds of society, man would for ever remain a savage beast.”[1341]
Whether we read Proudhon or Kropotkin, we always meet with the same emphasis on the reality of the social being, on the pre-existence of the State, or at least of its necessary coexistence, if the individual is ever to reach full development. It is true that there are a few anarchists, such as Jean Grave, who still seem to uphold the old futile distinction between the individual and society, and who conceive of society as made up of individuals just as a house is built of bricks.
But is there no element of contradiction between this idea and the previous declaration of individual autonomy? How is it possible to exalt social life and at the same time demand the abolition of all traditional social links?[1342]
The apparent antinomy is resolved by emphasising a distinction which Liberalism had drawn between government and society. Society is the natural, spontaneous expression of social life. Government is an artificial organ, or, to change the metaphor, a parasite preying upon society.[1343] Liberals from the days of Smith onward had applied the distinction to economic institutions; the anarchists were to apply it to every social institution. Not only the economic but every form of social life is the outcome of the social instinct which lies deep in the nature of humanity. This instinct of solidarity urges men to seek the help of their fellow-men and to act in concert with them. It is what Kropotkin calls mutual aid, and seems as natural to man and as necessary for the preservation of the species as the struggle for existence itself. What really binds society together, what makes for real cohesion, is not constraint (which, contrary to the time-honoured belief of the privileged classes, is really only necessary to uphold their privileges), but this profound instinct of mutual help and reciprocal friendship, whose strength and force have never yet been adequately realised. “There is in human nature,” says Kropotkin, “a nucleus of social habits inherited from the past, which have not been as fully appreciated as they might. They are not the result of any restraint and transcend all compulsion.”[1344]
Law, instead of creating the social instinct, simply presupposes it. Laws can only be applied so long as the instinct exists, and fall into desuetude as soon as the instinct refuses to sanction them. Government, far from developing this instinct, opposes it with rigid, stereotyped institutions which thwart its full and complete development. To free the individual from external restraint is also to liberate society by giving it greater plasticity and permitting it to assume new forms which are obviously better adapted to the happiness and prosperity of the race.[1345] Kropotkin in his delightful book Mutual Aid gives numerous examples of this spontaneous social instinct. He shows how it assumes different forms in the economic, scientific, educational, sporting, hygienic, and charitable associations of modern Europe; in the municipalities and corporations of the Middle Ages; and how even among animals this same instinct, which forms the real basis of all human societies, has enabled them to overcome the natural dangers that threaten their existence.
Anarchist society must not be conceived as a bellum omnium contra omnes, but as a federation of free associations which everyone would be at liberty to enter and to leave just as he liked. This society, Kropotkin tells us, would be composed of a multitude of associations bound together for all purposes that demand united action. A federation of producers would have control of agricultural and industrial, and even of intellectual and artistic, production; an association of consumers would see to questions of housing, lighting, health, food, and sanitation. In some cases the federation of producers would join hands with the consumers’ league. Still wider groups would embrace a whole country, or possibly several countries, and would include people employed in the same kind of work, whether industrial, intellectual, or artistic, for none of these pursuits would be confined to some one territory. Mutual understanding would result in combined efforts, and complete liberty would give plenty of scope for invention and new methods of organisation. Individual initiative would be encouraged; every tendency to uniformity and centralisation would be effectively checked.[1346]
In such a society as this complete concord between the general and the individual interests, hitherto so vainly sought after by the bourgeoisie, would be realised once for all in the absolute freedom now the possession of both the individual and the group, and in the total disappearance of all traces of antagonism between possessors and non-possessing, between governors and governed. Again we note a revival of the belief in the spontaneous harmony of interests which was so prominent a feature of eighteenth-century philosophy.[1347]
Such an attractive picture of society was bound to invite criticism. The anarchists foresaw this, and have tried to meet most of the arguments.
In the first place, would such extravagant freedom not beget abuse, unjustifiable repudiation of contracts, crimes and misdemeanours? Would it not give rise to chronic instability? and would the conscientious never find themselves the victims of the fickle and the fraudulent?
The anarchists agree that there may be a few pranks played, or, as Grave euphemistically calls them, “certain acts apparently altogether devoid of logic.”[1348] But can we not reckon upon criticism and disapproval checking such anti-social instincts? Public opinion, if it were once freed from the warping influence of present-day institutions, would possess far greater coercive force.[1349] Our present system of building prisons, “those criminal universities,” as Kropotkin calls them, will never check these anti-social instincts. “Liberty is still the best remedy for the temporary excesses of liberty.”[1350] Moreover, such a system would enjoy a superior sanction in the possible refusal of other people to work with those who could not keep their word.[1351] “You are a man and you have a right to live. But as you wish to live under special conditions and leave the ranks, it is more than probable that you will suffer for it in your daily relations with other citizens.”[1352]
But there is still a more serious objection. Were there no compulsion, would anyone be found willing to work? The host of idlers is at the present time vast, and without the sting of necessity it would become still greater. Kropotkin remarks that “it is only about the sugar plantations of the West Indies and the sugar refineries of Europe that robbery, laziness, and very often drunkenness become quite usual with the bees.”[1353] Is it not possible that men are just imitating the bee?
The anarchists point out that many a so-called idler to-day is simply a madcap who will soon discover his true vocation in the free society of the future, and will thus be gradually transformed into a useful member of society.[1354] Moreover, does not the fact that so many people shun work altogether prove that the present method of organising society must be at once cruel and repugnant? The certainty of being confined in an unhealthy workshop for ten or twelve hours every day, with mind and body “to some unmeaning task-work given,” in return for a wage that is seldom sufficient to keep a family in decent comfort, is hardly a prospect that is likely to attract the worker. One of the principal aims of the anarchist rÉgime—and in this respect it resembles the PhalanstÈre of Fourier—will be to make labour both attractive and productive.[1355] Science will render the factory healthy well lighted and thoroughly ventilated. Machinery will even come to the rescue of the housewife and will relieve her of many a disagreeable task. Inventors, who are generally ignorant of the unpleasant nature of many of these tasks, have been inclined to ignore them altogether. “If a Huxley spent only five hours in the sewers of London, rest assured that he would have found the means of making them as sanitary as his physiological laboratory.”[1356] Finally, and most important of all, the working day could then be reduced to a matter of four or five hours, for there would no longer be any idlers, and the systematic application of science would increase production tenfold.
The wonderful expansion of production under the influence of applied science is a favourite theme of the anarchists. Kropotkin has treated us to some delightful illustrations of this in his Conquest of Bread. He begins by pointing out the wonders already accomplished by market gardeners living in the neighbourhood of Paris. One of these, employing only three men working twelve to fifteen hours a day, was able, thanks to intensive cultivation, to raise 110 tons of vegetables on one acre of ground. Taking this as his basis, he calculates that the 3,600,000 inhabitants in the departments of the Seine and the Seine-et-Oise could produce all the corn, milk, vegetables, and fruit which they could possibly need in the year with fifty-eight half-days labour per man. By parity of reasoning he arrives at the conclusion that twenty-eight to thirty-six days’ work per annum would secure for each family a healthy, comfortable home such as is occupied by English working men at the present time. The same thing applies to clothing. American factories produce on an average forty yards of cotton in ten hours. “Admitting that a family needs two hundred yards a year at most, this would be equivalent to fifty hours’ labour, or ten half-days of five hours each,[1357] and that all adults save women bind themselves to work five hours a day from the age of twenty or twenty-two to forty-five or fifty.… Such a society could in return guarantee well-being to all its members.”[1358] ÉlisÉe Reclus shares these hopes. It seems to him that “in the great human family hunger is simply the result of a collective crime, and it becomes an absurdity when we remember that the products are more than double enough for all the needs of consumers.”[1359]
Amid such superabundant wealth, in a world thus transformed into a land of milk and honey, distribution would not be a very difficult problem. Nothing really could be easier. “No stint or limit to what the community possesses in abundance, but equal sharing and dividing of those commodities which are scarce or apt to run short.”[1360] Such was to be the guiding principle. In practice the women and children, the aged and the infirm, were to come first and the robust men last, for such even is the etiquette of the soup kitchen, which has become a feature of some recent strikes. As to the laws of value which are supposed to determine the present distribution of wealth, and which the economists fondly believe to be necessary and immutable, the anarchists regard them as being no concern of theirs. The futility of such doctrines is a source of some amusement to them.[1361]
IV: REVOLUTION
But how is the beautiful dream to be realised? The way thither, from the miserable wilderness wherein we now dwell to the Promised Land of which they have given us a glimpse, lies through Revolution—so the anarchist tells us.
A theory of revolution forms a necessary part of the anarchist doctrine. In the mind of the public it is too often thought to be the only message which the anarchists have to give. We must content ourselves with a very brief reference to it, for the non-economic ideas of anarchism have already detained us sufficiently long.
Proudhon is soon out of the running. We have already had occasion to refer to his disapproval of violence and revolution. It seemed to him that the anarchic ideal was for ever impossible apart from a change of heart and a reawakening of conscience. But his successors were somewhat less patient. To their minds revolution seemed an unavoidable necessity from which escape was impossible. Even if we could imagine all the privileged individuals of to-day agreeing among themselves on the night of some fourth of August to yield up every privilege which they possess and to enter the ranks of the proletariat of their own free will, such a deed would hardly be desirable. The people, says Reclus, with their usual generosity, would simply let them do as they liked, but would say to their former masters, “Keep your privileges.” “It is not because justice should not be done, but things ought to find a natural equilibrium. The oppressed should rise in their own strength, the despoiled seize their own again, and the slaves regain their own liberty. Such things can only really be attained as the result of a bitter struggle.”[1362]
It is not that Bakunin, Kropotkin, or their disciples revel in bloodshed or welcome outbreaks of violence. Bloodshed, although inevitably and inseparably connected with revolution, is none the less regrettable, and should always be confined within the narrowest limits. “Bloody revolutions are occasionally necessary because of the crass stupidity of mankind; but they are always an evil, an immense evil, and a great misfortune; not only because of their victims, but also because of the pure and perfect character of the aims in view of which they are carried out.”[1363] “The question,” says Kropotkin,[1364] “is not how to avoid revolutions, but how to secure the best results by checking civil war as far as possible, by reducing the number of victims, and by restraining the more dangerous passions.” To do this we must rely upon people’s instincts, who, far from being sanguinary, “are really too kind at heart not to be very soon disgusted with cruelty.”[1365] The attack must be directed not against men but against their position, and the aim must be not individuals but their status. Hence Bakunin lays great stress upon setting fire to the national archives, and to papers of all kinds relating to title in property, upon the immediate suppression of all law courts and police, upon the disbanding of the army, and the instant confiscation of all instruments of production—factories, mines, etc. Kropotkin in the Conquest of Bread gives us a picture of an insurgent commune laying hold of houses and occupying them, seizing drapers’ establishments and taking whatever they need, confiscating the land, cultivating it, and distributing its products. If revolutionists only proceeded in this fashion, never respecting the rights of property at all (which was the great mistake made by the Commune in its dealing with the Bank of France during the rising of 1871), the revolution would soon be over and society would speedily reorganise itself on a new and indestructible basis and with a minimum of bloodshed.
But the tone is not always equally pacific. Bakunin during at least one period of his life preached a savage and merciless revolution against privilege of every kind. At that time, indeed, he might justly have passed as the inventor of the active propaganda which, strenuously pursued for many years by a few exasperated fanatics, had the effect of rousing public opinion everywhere against anarchism. “We understand revolution,” someone has remarked, “in the sense of an upheaval of what we call the worst passions, and we can imagine its resulting in the destruction of what we to-day term public order.” “Brigandage,” it is remarked elsewhere, “is an honourable method of political propaganda in Russia, where the brigand is a hero, a defender and saviour of the people.”[1366] In a kind of proclamation entitled The Principles of Revolution, which, as some writers point out, ought not to be attributed to Bakunin, but which at any rate appears to give a fair representation of his ideas at this period of his life, we meet with the following words: “The present generation should blindly and indiscriminately destroy all that at present exists, with this single thought in mind—to destroy as much and as quickly as possible.”[1367] The means advocated are of a most varied description: “Poison, the dagger, and the sword … revolution makes them all equally sacred. The whole field is free for action.”[1368] Bakunin had always shown a good deal of sympathy for the rÔle of the conspirator. In the Statutes of the International Brotherhood, which prescribed the rules of conduct for a kind of revolutionary association created by Bakunin in 1864, are some passages advocating violence which are as bloodcurdling as anything contained in Netchaieff’s famous Revolutionary Catechism. It is difficult to find lines more full of violent revolutionary exasperation than that passage of the Statutes of the International Socialist Alliance which forms the real programme of the anarchists. Since it also seems to us to give a fairly faithful expression of Bakunin’s thoughts on the matter, it will afford a fitting close to our exposition.
“We want a universal revolution that will shake the social and political, the economic and philosophical basis of society, so that of the present order, which is founded upon property, exploitation, dominion, and authority, and supported either by religion or philosophy, by bourgeois economics or by revolutionary Jacobinism, there may not be left, either in Europe or anywhere else, a single stone standing. The workers’ prayer for peace we would answer by demanding the freedom of all the oppressed and the death of everyone who lords it over them, exploiters and guardians of every kind. Every State and every Church would be destroyed, together with all their various institutions, their religious, political, judicial, and financial regulations; the police system, all university regulations, all social and economic rules whatsoever, so that the millions of poor human beings who are now being cheated and gagged, tormented and exploited, delivered from the cruellest of official directors and officious curates, from all collective and individual tyranny, would for once be able to breathe freely.”[1369]
A discussion of anarchist doctrine lies beyond our province. Moreover, such sweeping generalisations disarm all criticism. Their theories are too often the outbursts of passionate feeling and scarcely need refuting. Let us, then, try to discover the kind of influence they have had.
We are not going to speak of the criminal outrages which unfortunately have resulted from their teaching. Untutored minds already exasperated by want found themselves incapable of resisting the temptations to violence in face of such doctrines. Such deeds, or active propaganda as they call it, can have no manner of justification, but find an explanation in the extreme fanaticism of the authors. It is not very easy to attribute such violence to a social doctrine which, according to the circumstances, may on the one hand be considered as the philosophy of outrage and violence, and on the other as an ideal expression of human fraternity and individual progress.
The influence of which we would speak is the influence which anarchy has had upon the working classes in general. Undoubtedly it has led to a revival of individualism and has begotten a reaction against the centralising socialism of Marx. Its success has been especially great among the Latin nations and in Austria, where it seemed for a time as if it would supplant socialism altogether. Very marked progress has also been made in France, Italy, and Spain. Is it because individuality is stronger in those countries than elsewhere? We think not. The fact is that wherever liberty has only recently been achieved, order and discipline, even when freely accepted, seem little better than intolerable signs of slavery.
An anarchist party came into being between 1880 and 1895. But since 1895 it seems to have declined. This does not mean that the influence of anarchism has been on the wane, but simply that it has changed its character. In France especially many of the older anarchists have joined the Trade Union movement, and have occasionally managed to get the control of affairs into their own hands, and under their influence the trade unions have tried to get rid of the socialist yoke. The ConfÉdÉration gÉnÉrale du Travail has for its motto two words that are always coupled together in anarchist literature, namely, “Welfare and liberty.” It has also advocated “direct action”—that is, action which is of a definitely revolutionary character and in defiance of public order. Finally, it betrays the same impatience with merely political action, and would have the workers concentrate upon the economic struggle.
The prophets of revolutionary syndicalism deny any alliance with anarchy. But, despite their protests, it would be a comparatively easy matter to point to numerous analogies in the writings of Bakunin and Kropotkin. Moreover, they admit that Proudhon, as well as Marx, has contributed something to the syndicalist doctrine; and we have already noted the intimate connection which exists between Proudhon and the anarchists.
The first resemblance consists in their advocacy of violence as a method of regenerating and purifying social life. “It is to violence,” writes M. Sorel, “that socialism owes those great moral victories that have brought salvation to the modern world.”[1370] The anarchists in a similar fashion liken revolution to the storm that clears the threatening sky of summer, making the air once more pure and calm. Kropotkin longs for a revolution because it would not merely renew the economic order, but would also “stir up society both morally and intellectually, shake it out of its lethargy, and revive its morals. The vile and narrow passion of the moment would be swept aside by the strong breath of a nobler passion, a greater enthusiasm, and a more generous devotion.”[1371]
In the second place, moral considerations, which find no place in the social philosophy of Marx, are duly recognised by Sorel and by the anarchist authors. Bakunin, Kropotkin, and Proudhon especially demand a due respect for human worth as the condition of every man’s liberty. They also proclaim the sovereignty of reason as the only power that can make men really free. M. Sorel, after showing how the new school may be easily distinguished from official socialism by the greater stress which it lays upon the perfection of morals, proceeds to add that on this point he is entirely at one with the anarchists.[1372]
Finally, their social and political ideals are the same. In both cases the demand is for the abolition of personal property and the extinction of the State. “The syndicalist hates the State just as much as the anarchist. He sees in the State nothing but an unproductive parasite borne upon the shoulder of the producer and living upon his substance.”[1373] And Sorel regards socialism as a tool in the hands of the workers which will some day enable them to get rid of the State and abolish the rights of private property.[1374] “Free producers working in a factory where there will be no masters”[1375]—such is the ideal of syndicalism, according to Sorel. There is also the same hostility shown towards democracy as at present constituted and its alliance with the State.
But despite many resemblances the two conceptions are really quite distinct. The hope of anarchy is that spontaneous action and universal liberty will somehow regenerate society. Syndicalism builds its faith upon a particular institution, the trade union, which it regards as the most effective instrument of class war. On this basis there would be set up an ideal society of producers founded upon labour, from which intellectualism would be banished. Anarchy, on the other hand, contents itself with a vision of a kind of natural society, which the syndicalist thinks both illusory and dangerous.
It has not been altogether useless, perhaps, to note the striking analogy that exists between these two currents of thought which have had such a profound influence upon the working-class movement during the last fifteen years, and which have resulted in a remarkable revival of individualism.
