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

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

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

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

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

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

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

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

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

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

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

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

Mr. Lloyd George continued:—

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"A workday of not more than eight hours."

"The abolition of the sweat-shop system."

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

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

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

"Laws limiting woman's labor."

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

[46] "Fabianism and Empire," p. 62.