Chapter VI: Part 6

It was inevitable that this differentiation of manager and capitalist should arise. It is part of the process of capitalist evolution due to machine industry. As competition led to waste in production, so it led to the cutting of profits among capitalists. To prevent this the massing of capital was necessary, by which the large capitalists could undersell his small rivals by offering, at prices below anything they could afford to sell at, goods produced by machinery and distributed by a plexus of agencies initially too costly for any individual competitor to purchase or set on foot. Now for such massive capitals, the contributions of several capitalists are needed; and hence has arisen the Joint Stock Company or _Compagnie Anonyme_. Through this new capitalist agency a person in England can hold stock in an enterprise at the Antipodes which he has never visited and never intends to visit, and which, therefore, he cannot “superintend” in any way. He and the other shareholders put in a manager with injunctions to be economical. The manager’s business is to earn for his employers the largest dividends possible: if he does not do so he is dismissed. The old personal relation between the workers and the employer is gone; instead thereof remains merely the cash nexus. To secure high dividends the manager will lower wages. If that is resisted there will probably be either a strike or lock-out. Cheap labor will be perhaps imported by the manager; and if the work-people resist by intimidation or organized boycotting, the forces of the State (which they help to maintain) will be used against them. In the majority of cases they must submit. Such is a not unfair picture of the relation of capitalist to workman to-day: the former having become an idle dividend-receiver. The dictum of orthodox political economy, uttered by so competent an authority as the late Professor Cairnes, runs:--

“It is important, on moral no less than on economic grounds, to insist upon this, that no public benefit of any kind arises from the existence of an idle rich class. The wealth accumulated by their ancestors and others on their behalf, where it is employed as capital, no doubt helps to sustain industry; but what they consume in luxury and idleness is not capital, and helps to sustain nothing but their own unprofitable lives. By all means they must have their rents and interest, as it is written in the bond; but let them take their proper place as drones in the hive, gorging at a feast to which they have contributed nothing.”[55]

The fact that the modern capitalist may be not only useless but positively obstructive was well illustrated at a meeting of the shareholders of the London and South Western Railway on 7th February last. Three shareholders urged a reduction in third-class fares. The chairman pointed out the obvious fact that such a reduction would probably lower the dividend, and asked the meeting if that was what they wished. He was, of course, answered by a chorus of “No, no!” and all talk of reduction of fares was at an end. Here is a plain sample (hundreds might be quoted) of the evident interests of the public being sacrificed to those of the capitalist.

That joint-stock capitalism is extending rapidly everyone knows. In the United States, according to Mr. Bryce, the wealth of joint-stock corporations is estimated at one-fourth of the total value of all property.[56] In England every kind of business, from breweries, banks, and cotton-mills down to automatic sweetmeat machines, is falling into the hands of the joint-stock capitalist, and must continue to do so. Twenty years ago who would have supposed that a brewery like that of Guinness or such a banking firm as Glyn Mills, and Co. would become a joint-stock company? Yet we know it is so to-day. Capitalism is becoming impersonal and cosmopolitan. And the combinations controlling production become larger and fewer. Baring’s are getting hold of the South African diamond fields: A few companies control the whole anthracite coal produce of Pennsylvania. Each one of us is quite “free” to “compete” with these gigantic combinations, as the Principality of Monaco is “free” to go to war with France should the latter threaten her interests. The mere forms of freedom remain; but monopoly renders them nugatory. The modern State, having parted with the raw material of the globe, cannot secure freedom of competition to its citizens; and yet it was on the basis of free competition that capitalism rose. Thus we see that capitalism has cancelled its original principle--is itself negating its own existence. Before considering its latest forms, attention may here be conveniently directed to the Co-operative movement, which is, on one side at any rate, closely allied to the joint-stock development.

The Co-operative movement had in England a Socialistic origin: for its founder was Robert Owen. As Mr. Seligman says very truly in the _Political Science Quarterly_: “Owen was the founder of the Co-operative movement in England, a fact often ignored by those who glibly use the word to-day with an utter failure to discern its true significance.” And Owen himself avowed that his grand ultimate object was “community in land,” with which he hoped would be combined “unrestrained co-operation on the part of all, for every purpose of human life.” It is thus important to associate co-operation with Robert Owen--_clarum et venerabile nomen_--because there are many persons who suppose that co-operation began with the Rochdale Pioneers in 1844. What the Rochdale movement really did was to commence the process of joint-stock shop-keeping, a very different thing from that which Owen had in view.

A powerful impetus was given to co-operation by the Christian Socialist movement under Maurice and Kingsley. “Of all narrow, conceited, hypocritical, anarchic and atheistic schemes of the Universe,” said Kingsley, “The Cobden and Bright one is exactly the worst.” The orthodox economic conclusions of the day fared badly at Kingsley’s hands. “The man who tells us,” said he, “that we ought to investigate Nature, simply to sit patiently under her, and let her freeze, and ruin, and starve, and stink us to death, is a goose, whether he calls himself a chemist or a political economist.” These Christian Socialist leaders felt deeply the anguish and poverty of the workers and the selfish apathy of the rich. “Mammon,” says Kingsley, “shrieks benevolently whenever a drunken soldier is flogged; but he trims his paletot and adorns his legs with the flesh of men and the skins of women, with degradation, pestilence, heathendom, and despair; and then chuckles complacently over his tailor’s bills. Hypocrite! straining at a gnat and swallowing a camel.” All this is very admirable; but cheap clothes are not made solely or chiefly for Mammon, but for the masses, who are poor people. It is part of the sad irony of the situation that the great majority are obliged to accept the alternative of cheap clothes or none at all. And as the English climate and the British matron combine to exercise an absolute veto over the latter form of prehistoric simplicity, it follows that one portion of the working-classes must, in order to be clothed, connive at the sweating of another portion.

The _Christian Socialist_, which was the organ of Maurice and Kingsley, betrayed great simplicity as to the real nature of the economic problem. It neglected Owen’s principle of “community in land,” and supposed that by working together and selling articles of good quality at a fair price poverty could be eliminated, while yet every worker in the community was paying his tribute of economic rent to the owners of the instruments of production. Thus the movement had no economic basis; and when the moral idealism had departed from it, no wonder that it degenerated into mere “divvy” hunting and joint-stock shop-keeping. The economic advantages of joint-stock shop-keeping are thus summed up by Mr. Robert Somers in the “Encyclopædia Britannica” (Art., “Co-operation”): “Wholesome commodities, ready-money payments, a dividend of from five to ten per cent on share capital, and a bonus to non-members on the amount of their purchases.” As joint-stock shop-keeping, co-operation is a useful and cheap method of distribution, which has doubtless benefited a considerable number of persons; but the notion that it can solve the economic problem before society is “chimerical,” as Dr. J. K. Ingram tells us is the opinion of modern economists.[57] This, indeed, might only be expected from the fact that 961 out of every 1,000 persons in England die without furniture, investments, or effects worth £300.[58] Economically considered, co-operation is, now that the initial enthusiasm has died out of it, a subsidiary branch of the great joint-stock enterprise. Ethically considered, its results are often doubtful. In its chief stronghold, Lancashire, one observes a narrow selfishness among its votaries, which could not be surpassed in the most genteel quarters of Bayswater. Its ideal is not the raising of the working class as a whole, but the raising of certain persons out of the working into the middle class. If the advocates of co-operation will abate their pretensions, and claim merely (1) that their method is a useful and economic means of distribution among the lower-middle and upper-working classes; and (2) that by its agency working men can learn the important functions of organization and administration, their claim will be freely admitted. But if they go further their vaulting ambition will o’erleap itself. At the present rate of progress made by co-operative societies as compared with joint-stock capitalist companies, several generations will be in their graves before any deep or general impression is made. And meanwhile, unless economic rent is diverted from the class which at present absorbs it to the community which creates it, co-operators, like the rest of us, must pay tribute to the lords of the soil and of money. But the noteworthy fact about co-operation, is that its very existence testifies to the process of industrial and capitalist aggregation here insisted on as the great social factor of our period. For co-operative societies supersede individual by social distribution, effecting it without the waste attendant on a number of little shops all competing against each other, the owners of none of which can make a decent living. Co-operation, therefore, well illustrates the economic evolution of the present age.

I now come to treat of the latest forms of capitalism, the “ring” and the “trust,” whereby capitalism cancels its own principles, and, as a seller, replaces competition by combination. When capitalism buys labor as a commodity it effects the purchase on the competitive principle. Its indefinitely extended market enables it to do so; for it knows that the workman must sell his labor to secure the means to live. Other things being equal, therefore, it buys its labor in the cheapest market. But when it turns round to face the public as a seller, it casts the maxims of competition to the winds, and presents itself as a solid combination. Competition, necessary at the outset, is found ultimately, if unchecked, to be wasteful and ruinous. It entails great expense in advertising; it necessitates the employment of much unproductive labor; it tends to the indefinite lowering of prices; it produces gluts and crises, and renders business operations hazardous and precarious. To escape these consequences, the competing persons or firms agree to form a close combination to keep up prices, to augment profits, to eliminate useless labor, to diminish risk, and to control the output. This is a “ring,” which is thus a federation of companies. The best examples of “rings” and “pools” are to be found in America, where capitalism is more unrestrained and bolder in its operations than in Europe; and also where nearly all the active intellect is attracted to those commercial pursuits that dominate American life.

The individualist devotees of _laisser faire_ used to teach us that when restrictions were removed, free competition would settle everything. Prices would go down, and fill the “consumer” with joy unspeakable; the fittest would survive; and as for the rest--it was not very clear what would become of them, and it really didn’t matter. No doubt the “consumer” has greatly benefited by the increase in production and the fall in prices; but where is “free competition” now? Almost the only persons still competing freely are the small shopkeepers, trembling on the verge of insolvency, and the workingmen, competing with one another for permission to live by work. Combination is absorbing commerce. Here are a few instances of the formation of rings.

A steel rail combination was some years ago formed among previously competing firms in America. This combination discovered that too many rails were being made and that prices were being cut. Accordingly, one of the mills in the combination--the Vulcan mill of St. Louis--was closed, and stood smokeless for years: its owners meanwhile receiving a subsidy of $400,000 a year from the other mills in the combination for _not_ making rails. That is how the owners of the Vulcan mill earned their “wages of superintendence.” It is needless to add that no payment was made to the men for _not_ working: they were thrown on the streets to meditate on the right to “liberty and the pursuit of happiness,” secured to them by the Declaration of Independence.

Or, again, take the case of the anthracite coal lands of Pennsylvania, occupying an area of some 270,000 acres, and held by the Reading Coal and Iron Company, the Lehigh Valley Railroad, the Delaware, Lackawanna and Western Railroad, the Delaware and Hudson Railroad, the Pennsylvania Railroad, the Pennsylvania Coal Company, and smaller firms and corporations tributary to these. The rich owners, popularly known as the “coal barons,” agree to fix absolutely the wholesale price of coal, always securing an immense rise just before the winter sets in. There is no such thing known or possible as free trade or open competition in the anthracite coal produce of America.

Combinations in the United States have been made by the Western millers, the New York icemen, Boston fish dealers, manufacturers of sewer-pipe, copper miners, makers of lamps, pottery, glass, hoop-iron, shot, rivets, candy, starch, sugar, preserved fruits, glucose, chairs, vapor stoves, lime, rubber, screws, chains, harvesting machinery, pins, salt, hardware, type, brass tubing, silk and wire. In these trades freedom of production and sale has been for a time partially or wholly destroyed. The American business man is very angry when boycotting is resorted to by workmen; but he is quite ready to boycott others when his interests lead that way. The stamped tinware makers in 1882, formed a ring and expelled members who sold at lower prices than the fixed rates, and refused to allow anyone in the pool to sell to the offenders. Some of the previous facts are taken from an article by Mr. Henry D. Lloyd,[59] who has investigated capitalist combinations with much knowledge and insight. From the same article I quote the following:

“On the 1st of April, 1882, when the rest of us were lost in the reckless gaity of All Fools’ Day, forty-one tack manufacturers found out that there were too many tacks, and formed the Central Manufacturing Company of Boston, with 3,000,000 dollars capital. The tack-mills in the combination ran about three days in the week. When this combination a few weeks ago silenced a Pittsburg rival by buying him out, they did not remove the machinery. The dead chimneys and idle machines will discourage new men from starting another factory, or can be run to ruin them if they are not to be discouraged in any other way. The first fruits of the tack-pool were an increase of prices to twice what they had been.”

Again I quote Mr. Lloyd:

“The men who make our shrouds and coffins have formed a close corporation known as the ‘National Burial Case Association,’ and held their annual convention in Chicago last year. Their action to keep up prices and keep down the number of coffins was secret, lest mortality should be discouraged.”

From coffins to crackers is a short step in the study of capitalist methods:

“The Western Cracker Bakers’ Association met in Chicago, in February, to consider among other things ‘the reprehensible system of cutting prices’ (_i. e._, the reprehensible system of free competition which capitalists in buying labor tell us is our salvation). They first had a banquet. After their ‘merriment and diversion’ the revellers, true to Adam Smith’s description, turned to consider ‘some contrivance to raise prices.’ ‘The price-lists were perfected,’ said the newspaper report; ‘and then they adjourned.’”

In 1875 broke out a severe competition among the fire insurance companies, upon the collapse of a previous pool; and the competition cost them in New York City alone $17,500,000 in seven years. Consequently in 1882 they made a new combination which covered the whole country, and which Mr. Lloyd declares to be wealthy, cohesive, and powerful. Though there is no pool or ring, I am credibly informed that there is a common understanding among the fire insurance companies of London. One of the most noted of combinations has been the great Copper Syndicate which attracted world-wide attention early in 1888. It was formed by some French speculators in October, 1887, and during the eighteen months of its existence, maintained copper at a purely arbitrary price in all the markets of the world. At its head was M. Eugène Secretan, managing director of the Société des Métaux, the world’s largest buyer of, and dealer in, manufactured copper. The syndicate’s agents bought all the copper that was visible and for sale, the result of their speculation being that the price of copper in the London market rose from less than £40 to over £80 a ton, and the price of Lake Superior copper in America rose from 10¹⁄₂ cents to 17³⁄₄ cents per pound. M. Secretan informed a London journal that his designs were purely philanthropic. “Our only purpose,” said he, “is that every miner, dealer and manufacturer should have fair remuneration for his work.” Thanks to M. Secretan’s philanthropy, copper, tin, lead and spelter rose enormously in price; several trades were more or less paralysed; and in France large numbers of workmen were thrown out of employment. And let it not be supposed that the suicide of M. Denfert-Rochereau, which heralded the collapse of this first attempt to corner the world’s copper--a collapse due to a miscalculation of the extent to which the supply of copper could increase under the stimulus of high prices--offers us any security against a repetition of the attempt. On the contrary, it has shewn how the thing may be safely done. The metal hoarded by the unlucky speculators is still so far cornered that it has been kept off the market up to the present, prices being not yet normal. “To a regular trust it must and will come at last,” says Mr. E. Benjamin Andrews, of Cornell University. “Nor has aught taken place to indicate that a Copper Trust, organized like the Standard Oil Trust, with its energy and relentless methods, would fail.”[60]

The Individualist who supposes that Free Trade plus private property will solve all economic problems is naturally surprised at these “rings,” which upset all his crude economic notions; and he very illogically asks for legislation to prevent the natural and inevitable results of the premises with which he starts. It is amusing to note that those who advocate what they call self-reliance and self-help are the first to call on the State to interfere with the natural results of that self-help, of that private enterprise, when it has overstepped a purely arbitrary limit. Why, on ordinary commercial principles, should not a copper syndicate grasp all the copper in the world? It is merely the fittest surviving. The whole case against Socialism is assumed by its most intelligent opponents to lie in that Darwinian theory. And yet when the copper syndicate or the “coal barons” survive, they arouse against themselves the fiercest and, from the commercial point of view, the most unreasonable antagonism. As sin when it is finished is said to bring forth death, so capitalism when it is finished brings forth monopoly. And one might as well quarrel with that plain fact as blame thorns because they do not produce grapes, or thistles because they are barren of figs.

The story of the growth of capitalism is not yet complete. The “ring” is being succeeded by a more elaborate organization known as the “trust.” Although in England great combinations like the Salt Union are rapidly rising, yet we must again travel to America to learn what the so-called “trust” is. The fullest information on the subject of trusts is contained in a report of a Committee of the New York State Legislature, which was appointed to investigate the new combination. The following trusts were inquired into: Sugar, milk, rubber, cotton-seed oil, envelope, elevator, oil-cloth, Standard oil, butchers’, glass, and furniture. A trust is defined by the Committee as a combination “to destroy competition and to restrain trade through the stockholders therein combining with other corporations or stockholders to form a joint-stock company of corporations, in effect renouncing the powers of such several corporations, and placing all powers in the hands of trustees.” The general purposes and effects are stated to be “to control the supply of commodities and necessities; to destroy competition; to regulate the quality; and to keep the cost to the consumer at prices far beyond their fair and equitable value.” It is unnecessary to deal with all these trusts, which possess certain features in common. I will select one or two, particularly the great Standard Oil Trust and the Cotton-seed Oil Trust.

The Standard Oil Trust is probably the largest single business monopoly in the world, the value of all its included interests being estimated, according to the evidence submitted, at £29,600,000. In the report it is described as “one of the most active and possibly the most formidable monied power on this continent. Its influence reaches into every State, and is felt in remote villages; and the products of its refineries seek a market in almost every seaport on the globe.” The germ of this huge monopoly was a small petroleum refinery near Cleveland, bought by one Rockefeller, a book-keeper in a store, and a friend of his, a porter, with borrowed money. Rockefeller formed an acquaintance with a rich whiskey distiller, who advanced money and put his son-in-law Flagler into the business. This person’s doctrines are thus described: “He says that there is no damned sentiment about business; that he knows no friendship in trade; and that if he gets his business rival in a hole he means to keep him there.” Such a man is eminently fitted to be the founder of a monopoly: he is a hero of self-help; for he helps himself to anything he can lay his hands on. A second refinery was established in Ohio, and a warehouse opened in New York. The concern grew, and was incorporated as the Standard Oil Company. It is charged with having secured special legislation by judicious expenditure in the lobbies of the Ohio and Pennsylvania Legislatures. By entering into arrangements with the trunk railway lines, it secured special rates for transit. New refineries were established and new oil lands in Pennsylvania acquired; the capital was increased; and an enormous yearly business was done. After a time the company controlled every avenue of transportation; managed all the largest refineries in the land; and was able to shut off every competitor from either receiving supplies or shipping its products. New companies, nominally distinct, but all under the control of the same men, were incorporated in New Jersey, Ohio, West Virginia and other States. The monopoly elected one of its chief stockholders into the United States Senate, it is said, through bribery in the Ohio Legislature over which body it certainly acquired strong hold. These tactics were known as “coal oil politics.” All the dirty work was, of course, done through agents, the directors pretending perfect innocence. In 1882 the Standard Oil Companies were consolidated in the Standard Oil Trust.[61] The stockholders surrendered their stock to the trustees, nine in number, created under the agreement, and received certificates in the place thereof, the representatives of the trust and the stockholders in the refineries making a joint valuation of the refineries, and the certificates being issued to that amount. Thus the separate concerns were merged in one gigantic business, controlled by nine men (owning a majority of the stock), having a monopoly of nearly all the oil lands in America, controlling legislative votes, forming a solid alliance with the railway and shipping interests, and determining to a gallon how much oil shall be produced and refined, and to a fraction of a cent what shall be its price. In 1887 there was a cash dividend of 10 per cent. declared, besides a stock dividend of 20 per cent. on the certificates of four years’ aggregation. In addition to the enormous stock they hold, the trustees receive an annual salary of £5,000. What are the economic results of this combination? It has not raised prices, as the trusts were charged by the committee with doing. On the contrary there has been a steady decrease in price during the decade 1877-1887. The consumption of oil has also enormously increased. The working and producing expenses have been greatly lowered by the dismissal of needless labor and vast improvements in machinery; the pipe lines controlled by the trust having displaced 5,700 teams of horses and 11,400 men in handling the oil. Thus of this trust we may say that though the means used to establish it were morally doubtful or even bad, the political results disastrous, the economic results have been beneficial, except in the matter of helping to form an unemployed class through the dismissal of needless labor consequent on the development of machinery.

The Cotton-seed Oil Trust was organized two or three years ago in the State of Arkansas.[62] Upwards of seventy different companies had been competing with each other and consequently suffering heavy losses. Their mills being comparatively small and equipped with imperfect machinery, they were glad to combine; and those that did not were forced to close. The seventy corporations, the vast majority of the members of which had agreed to the combination, surrendered their stock to a body of trustees and received in return $100 certificates. The various mills send a monthly report to the trust; and if the officers in a given mill do not sell at the terms imposed, they are dismissed by the trust.[63] The object of the trust was declared by a witness to be to prevent bankruptcy, to improve methods, to find markets, to develop the enterprise and to make money. The economic result has been displacement of labor by the machinery and great economy in production. Incidentally it came out that much cotton-seed oil was sold to the French and Italian buyers, who mix it with a little olive oil and export it back to America and to England, where a confiding public purchases it as pure Tuscan olive oil--an interesting illustration of international trade morality.

An examination of the milk and butchers’ trust ought to be a revelation to those who imagine that trade is “free,” and that competition rules. On April 29th, 1885, the directors of the Milk Exchange met in New York and unanimously resolved:

“That on the first day of May next, and until otherwise ordered, the market price of milk produced from meadow hay and sound cereals be 2¹⁄₂ cents per quart, and that produced from brewers’ grains and glucose and corn starch refuse be 2 cents per quart.”[64]

A representative of the Sheep and Lamb Butchers’ Mutual Benefit Association testified that the members of that body agreed that they would only buy sheep and calves from the Sheep Brokers’ Association, a penalty for violation of this rule being imposed at the rate of 15 cents a head per sheep or calf. The absolute despotism, and the system of espionage involved in such regulation is obvious. Here is a copy of a document issued by this body:

“New York, January 9, 1888. Permission has been granted by the board of trustees of this association to Simon Strauss to buy sheep and lambs in New York markets, providing he buys no sheep and lambs from outsiders, under penalty of 15 cents per head fine. Richard S. Tobin, Secretary.”[65]

Occasionally the Association relaxed. On November 5th, 1887, according to its minutes,

“The application of John Healey, No. 2, to be granted the privilege of buying a few sheep and lambs without the 15 cents being charged to the brokers, was favorably acted upon.”

This is not a record of Bagdad under the caliphs, but of the Republican State of New York! The threatened despotism of Socialism has been often eloquently dwelt on; but what of the actual despotism of to-day?

Now what does this examination of trusts show? That, granted private property in the raw material out of which wealth is created on a huge scale by the new inventions which science has placed in our hands, the ultimate effect must be the destruction of that very freedom which the modern democratic State posits as its first principle. Liberty to trade, liberty to exchange products, liberty to buy where one pleases, liberty to transport one’s goods at the same rate and on the same terms enjoyed by others, subjection to no _imperium in imperio_: these surely are all fundamental democratic principles. Yet by monopolies every one of them is either limited or denied. Thus capitalism is apparently inconsistent with democracy as hitherto understood. The development of capitalism and that of democracy cannot proceed without check on parallel lines. Rather are they comparable to two trains approaching each other from different directions on the same line. Collision between the opposing forces seems inevitable.

But both democracy and the new capitalist combinations which threaten it are inevitable growths of an evolutionary process. We are therefore brought to consider the question whether the ring, syndicate, or trust either can or ought to be destroyed. These combinations can be shown to be the most economical and efficient methods of organizing production and exchange. They check waste, encourage machinery, dismiss useless labor, facilitate transport, steady prices, and raise profits--i.e., they best effect the objects of trade from the capitalist’s point of view. Now, the opponents of Socialism say that without this enterprising capitalist we cannot live. He “provides employment,” they say. Well, if we need him, we must obviously pay his price. If he has a natural monopoly of a function indispensable to social progress, society must concede the terms he imposes. These terms are briefly large combinations of capitalist ownership. In this way he can best organize business; if we do not choose to let him do it in this way, he will not do it for us at all. From his point of view that is a fair position to take up; and it places the Individualist opponent of trusts in an awkward dilemma. For he must either submit to trusts or give up capitalists, in which latter case he becomes a Socialist. The answer of Socialism to the capitalist is that society can do without him, just as society now does without the slave-owner or feudal lord, both of whom were formerly regarded as necessary to the well-being and even the very existence of society. In organizing its own business for itself, society can employ, at whatever rate of remuneration may be needed to call forth their powers, those capitalists who are skilled organizers and administrators. But those who are mere dividend-receivers will no longer be permitted to levy a contribution on labor, but must earn their living by useful industry as other and better people have to do.

It may be said that society is not yet ripe for this transformation, nor is it. The forms of the democratic State are not yet perfected, nor has the economic evolution yet proceeded generally far enough, even in England, not to speak of the less advanced European countries. Much yet remains to be done through both the education of the intellect and the development of a nobler public spirit. But on the other hand we seem to be rapidly approaching such an _impasse_ that some very large and definite extension of collective authority must be made. This would seem to involve on one side general reduction of the hours of labor, and on the other an attempt to absorb by the community a portion of those social values which it creates. In reference to ground values it may be anticipated that local democratic authorities will secure them for the benefit of the people by any means which may be found expedient.

As regards the great combinations of capital, State action may take one of three courses. It may prohibit and dissolve them; it may tax and control them; or it may absorb and administer them. In either case the Socialist theory is _ipso facto_ admitted, for each is a confession that it is well to exercise a collective control over industrial capital. If the first of these courses is taken a distinctly retrogressive policy is definitely adopted, a policy of alarm at what Mr. Cleveland called the “communism of capital,” a policy of reversion to the chaos of “free competition,” and of cession of the undoubted benefits which combination has secured. Such a policy would signify the forcible prevention of acquisition of property, the very thing dearest to the Individualist. If the powers of acquisition, now evidently dependent on combination, are to be restricted, what becomes of the “incentive to industry,” the “reward of abstinence,” and all the rest of the worn out phrases which have so often done duty in the place of argument? If the syndicate or the trust represents the legitimate outcome of capitalism--if it is necessary to give order to trade and to prevent the ruinous waste of unrestricted competition, how absurd it is for the State to say to the capitalist: “You shall carry your privileges of acquisition just up to the point where competition is likely to ruin you; but there you shall stop. Immediately you and your friends combine to prevent waste, to regulate production and distribution, to apply new methods of manufacture, we shall absolutely prevent you or restrain you by vexatious regulations.” To which the capitalist may be supposed to reply: “I cannot fulfil my function in society at this serious risk. I shall never know security--never be even moderately sure of reaping that reward to which I am admittedly entitled. If you intend to fetter my action in this way after having proclaimed me free to own the raw material out of which wealth is made--if you compel me to stop at a purely arbitrary line, I must inform you that I am not going to undertake business on such terms.” Would not the capitalist say something like this; and from his point of view would he not be right?

If it were instantly possible to do so, we should take the capitalist at his word; appropriate the necessary instruments of production; and make them common property, the values they create accruing to the community. But the human race generally contrives to exhaust every device which stupidity can suggest before the right line of action is ultimately taken. I think therefore that some probably inefficient method of taxation and public control over combinations will, as a matter of fact, be adopted. Such legislation will immensely restrict individual liberty in certain directions, will produce much friction, and may possibly hamper production; until by a long series of experiments men shall discover what is the most reasonable way of acquiring for the community as a whole the wealth which it produces. But in any case individualism or anything whatever in the nature of _laisser faire_ goes by the board.

And now, finally, what is the immediate policy for rational students of economics and genuine social reformers to adopt? Their motto must be, _Nulla vestigia retrorsum_. To all quack proposals they must offer a steady resistance. These proposals will take the form of attempts to bring back some economic condition out of which society has emerged. One quack will desire to revive the old British yeomanry; another will talk nonsense about “Fair Trade;” a third will offer to the rustic “three acres and a cow”; while a fourth will see salvation in getting rid of primogeniture and entail and “planting” prosperous laborers on the soil--as though the laborers grew there like trees. Those who understand the economic crisis may be ready and eager to support any reform, however small, which is a genuine step forward: but they cannot support any effort to call back the past. They may help to build a new bridge across the gulf that separates us from the Co-operative Commonwealth; but they can never repair the old broken-down structure which leads back to Individualism. Instead, therefore, of attempting to undo the work which capitalists are unconsciously doing for the people, the real reformer will rather prepare the people, educated and organized as a true industrial democracy, to take up the threads when they fall from the weak hands of a useless possessing class. By this means will the class struggle, with its greed, hate, and waste, be ended, and the life hinted at by Whitman in his “Song of the Exposition” be attained:

“Practical, peaceful life, the people’s life, the People themselves,
Lifted, illumined, bathed in peace--elate, secure in peace.”

FOOTNOTES:

[51] Enc. Brit., art. “Cotton.”

[52] “History of the Eighteenth Century,” i. 202.

[53] See the evidence contained in Vol. I of Mr. Morse Stephen’s “History of the French Revolution.”

[54] History of the Eighteenth Century, iv, 450.

[55] “Some Leading Principles of Political Economy,” p. 32.

[56] “The American Commonwealth,” iii, note on p. 421.

[57] “Encyclopædia Britannica”: Art., “Political Economy.”

[58] Mulhall: “Dictionary of Statistics.”

[59] “Lords of Industry.” _North American Review_, June, 1884.

[60] Quarterly Journal of Economics, July, 1889.

[61] Report of Senate Committee, p. 419.

[62] Report of Senate Committee, p. 233, _et seq._

[63] Report, p. 244.

[64] Report of Senate Committee, p. 305.

[65] Report of Senate Committee, p. 497.

MORAL.

BY SYDNEY OLIVIER.

The argument of this fourth instalment of Socialist criticism may be provisionally described as an attempt to justify Socialist ideals by the appeals to canons of moral judgment accepted generally and supported by the results of positive ethical science. The previous essays have made it clear that we are dealing with Socialism in that restricted sense in which it is defined by Schaeffle,[66] as having for its aim “the replacement of private capital by collective capital: that is, by a method of production which, upon the basis of the collective property of the sum of all the members of the society in the instruments of production, seeks to carry on a co-operative organization of national work.” We are not dealing with Socialism as a religion, nor as concerned with questions of sex or family: we treat it throughout as primarily a property-form, as the scheme of an industrial system for the supply of the material requisites of human social existence.

If it were admitted that the establishment of such a system would guarantee just this much--that abject poverty should be done away, and that every man and woman should be ensured the opportunity of obtaining sufficient food and covering in return for a moderate day’s work, we might still be far from convincing some people that the realization of that ideal will be a good thing for the world. There are still a great many who, though they may not join in the common prophecy that the chief results of such a system would be an increase in beer-drinking and other stupid self-indulgence,[67] yet regard starvation and misery as part of the inevitable order of nature, and as necessary conditions of progress, conducive to the survival of what they are pleased to call the “fittest” types of life. Such critics see danger to progress in any attempt to enrol intelligence and adaptiveness into conscious combination against starvation and misery, to extinguish by concerted effort survivals of the accidents of primitive barbarism against which as individuals we are always struggling. This aim of Socialism, accordingly, does not wholly commend itself to their moral judgment, to their opinion of what is _good_ in the widest sense, although they may willingly admit that the aim possesses a certain element of shortsighted good intention. Other persons, influenced by religious conceptions older than that of progress, and regarding morality less as determined by reference to that end than as a concern of the individual, a certain state of the soul of each man, are inclined to view the material evils which Socialists desire to get rid of, as a necessary schooling and discipline without which individual morality would decay.

Against these doctrines Socialists would maintain that the ordering of our national life, and of the relations between individuals and social groups throughout the world in accordance with the principles of Socialism, is the effectual and indispensable process for ensuring to the mass of mankind the advantages of progress already effected and its continued and orderly development, and for the realisation, in individuals and the State, of the highest morality as yet imagined by us.

It may be well at this point to anticipate a challenge to define what is meant by the word “Morality,” and to briefly explain the position which will be assumed, and the method which will be followed throughout the succeeding observations. It must be remembered that the subject of this essay is “The Moral Aspect of the Basis of Socialism,” and not “The Socialist View of the Basis of Morals.” We may therefore conscientiously steer clear of the whirlpool of agelong controversy as to what that basis is, merely noting as we pass that any metaphysic of Ethics being necessarily universal, there is in this sense no special ethic or morality of Socialism. By such cautious procedure we sacrifice indeed the fascinating ambition to exhibit, by impressive dialectic pageant of deduction from first principles, the foundation of formal Socialism in the Idea that informs the universe. But we also avoid the certainty of losing, at the very outset of our attempted demonstration, the company of all but that minority who might assent to our fundamental propositions. A further sacrifice we shall make, in descending to the unpretentious methods of empiricism; for we thereby renounce the right of appeal to that theologic habit of mind common to Socialists with other pious persons. Mr. Henry George, educated under the American Constitution, may share the familiarity of its framers with the intentions of the Creator and the natural rights of Man. He may prove, as did Mr. Herbert Spencer in his generous youth, that private property in land is incompatible with the fundamental right of each individual to live and to own the product of his labor. But positive ethical science knows nothing of natural and fundamental rights: it knows nothing of individual liberty, nothing of equality, nothing of underlying unity. Yet here again our loss has some redress; for a brief survey will assure us that various schools of moral philosophy, differing in their characteristic first principles, are converging in the justification of Socialism; and that the practical judgments of contemporary mankind as to what sort of conduct is “moral,” and what conditions make for the increase of “common morality,” are in practice largely coincident. They offer, at least, a body of provisional opinion, or prejudice, to which we can appeal in presenting Socialism for criticism of its morality. The tribunal is by no means infallible: still, the common contemporary sense of humanity may count for something. But in approaching the criticism of Socialism from the point of view of ethics, we are bound to go a little deeper than this. While accepting the phenomena of current opinion on morality as part of our material, we must follow the explorations of ethical speculation into the causes and history of the development of those opinions. By examining the genesis of convictions that this or that kind of action is good or bad, moral or immoral, we shall be helped to form a judgment as to which appears likely to persist and be strengthened, and which to be modified, weakened, or forgotten. If the claim of Socialism rests on judgments of the latter class, we may know that it is a moribund bantling; if they preponderate among the obstacles to its credit, we may prophesy encouragingly of it; if it is supported by those judgments whose persistence seems essential to the survival of the individual and of society, we may be assured of its realisation in the future.

Socialism appears as the offspring of Individualism, as the outcome of individualist struggle, and as the necessary condition for the approach to the individualist ideal. The opposition commonly assumed in contrasting the two is an accident of the now habitual confusion between personality and personalty, between a man’s life and the abundance of things that he has. Socialism is merely Individualism rationalized, organized, clothed, and in its right mind. Socialism is taking form in advanced societies and the social revolution must be brought to its formal accomplishment through the conscious action of innumerable individuals seeking an avenue to rational and pleasant existence for themselves and for those whose happiness and freedom they desire as they do their own. All conscious action, all conscious modification of conditions, is inspired by the desire of such personal relief, satisfaction, or expression, by the attempt to escape from some physical or intellectual distress. “Subjective volition, passion it is,” says Hegel, “that sets men in activity: men will not interest themselves for anything unless they find their individuality gratified by its attainment.” This common end, this desire of personal relief or satisfaction, we see throughout recorded or indicated history impelling every living creature on the earth; merging itself, as we trace it backwards, in the mere apparent will to live of organisms not recognized as conscious, and in the indestructible energy of the inorganic. The field of activity thus conceived presents a panorama of somewhat large extent; but a very small division of it is all that we shall have to do with. For morality, whatever be its nature and basis, certainly does not become recognizable to us, we cannot attribute the quality of rightness or wrongness, until the formation of society has begun, until individuals are in conscious relation with individuals other than themselves.

If we could imagine an individual absolutely isolated, and having no relation at all with other sentient beings, _we_ could not say that it was moral or immoral for him to eat, drink, sleep, breathe, wash himself, take exercise, cough, sneeze, and the like, just as much or as little, when or where he felt inclined. His conduct in these activities must appear to us absolutely indifferent. We may have some vague reflected suppositions as to what is necessary for the dignity and development of the man’s “self,” as we might call it; but this is a matter about which the man may pretend to know as much as we do; and we have really no valid ground for prejudice against the habits of the recluse Indian fakir, who has, on the other hand, considerable claims to be regarded as a peculiarly holy individual. But of every man living in society we can say, that if he starves himself into inefficiency; if he gorges or fuddles himself; if he sleeps unseasonably; if he abstains from the fresh air, the cleanliness, and the exercise, necessary to keep his body healthy and his presence pleasant; if he destroys his powers by over-work; then he is acting wrongly, immorally, unreasonably, in extreme cases insanely. (Insanity is only the name we give to abnormal deviation from what are accepted as reasonable and intelligible desires and behavior.) And if this is the case with actions of the kind loosely described as self-regarding, with those which most nearly concern the agent’s own person, much more is it so with the kind of actions which necessarily and invariably affect other persons. Those relations of the individual with his fellows in which subjective morality is chiefly recognized, have no existence at all apart from society. Subjective morality, then, being only distinguishable in the State, the extent of our panorama is already much diminished; for in every gentile or national society, and to some degree in the World-State of to-day, we find the individualist activity, the desire and passion of the human unit, very largely exercising itself in accordance with what we call a moral habit. Innumerable types of society have been formed in the process of life-development. In the oldest of these we recognize the elements of a conventional morality, similar to that by which our own human society is held together. We consider the ways of the ant; and we see that they are wise.

We find that in all societies those actions and habits are approved as moral which tend to preserve the existence of society and the cohesion and convenience of its members; and that those which are or seem to be fraught with contrary tendencies are considered immoral. It is plain that no society in which these judgments were habitually reversed could continue in existence; and this fact will account for much of that general inherited disposition to actions socially beneficial, and inherited repugnance to those presumably the reverse, which form so large a part of what we speak of as conscience. So deep in grain have many of these common judgments come to be that their influence has passed out of consciousness; and they are obeyed automatically or instinctively without any reflexion as to their moral aspect arising in the agent’s mind. It is, for example, so necessary for the existence of society that the citizen should abstain from slaughtering at large, such self-restraint is so evidently reasonable, its non-observance so contrary to common sense, that when we find a murder done for mere desire of bloodshed and under the impulse of no other passion whatsoever, we do not think of the murderer as immoral, but rather as insane, judging the man who would destroy the life of society as coroners’ juries by their habitual verdict upon suicides pronounce of the man who destroys his own.

Most of the habits of activity and avoidance, necessary for the mere physical existence of the individual as moral actions and abstentions are necessary for the existence of society, have long ago become automatic, and are sunk, so far as common opinion is concerned, permanently out of the purview of moral criticism. All the involuntary functions of the human body which conduce to its nutrition and maintenance in health have been gradually acquired in the course of ages, as the conditions necessary for the expression of the mere animal will to live the largest and freest life permitted by the physical environment. And as the bodily form and functions of the typical individual of each species have accrued and become established as the indispensable mechanic of the mere determination to exist, so the form and institution of society, and the relations and mutual behavior of its individuals, have been adjusted and established as the equally indispensable conditions for the expression of the determination to exist more fully, for the enlargement of freedom and opportunity for the gratification of those passions and aspirations, the display of those energies and activities which characterize the more complex forms of life as it passes from the inorganic and vegetative to the conscious and self-conscious stages of its evolution.

The primitive forms of human society we must infer to have grown up and survived simply because they increased the efficiency of man as a feeding and a fighting animal, just as did those of the wolf, the beaver, and the ant. Society has now grown to be for man the indispensable guarantee not only of nutrition and protection, but of the opportunity to imagine and attain a thousand varieties of more refined satisfaction. So far as man has attained freedom to do and be as he desires, he has attained it only through the evolution of society. When a society perishes, as societies organically weak among stronger competitors have done and will do, the individual perishes with it, or is forced backwards with impaired freedom until a fresh social integration renews and extends his powers of self-development. Societies, as has been pointed out by Sidney Webb on page 51, must safeguard their existence to-day for the very same reasons for which society has formed itself. It has grown up for the convenience of individuals, for their defence and relief under the pressure of all that was not themselves--of Nature, as we call it--beasts, and competing men, to give a little breathing space, a little elbow room, amid the storm and stress of primæval existence; and from that beginning it has been unfolded and elaborated, each step of progress effected for the convenience of active individuals, until the individual of to-day is born as a leaf upon a mighty tree, or a coral insect in a sponge, himself to live his individual life, and in living it to modify the social organism in which he has his being.