Socialists intend to "tax the rich out of existence." Therefore they endeavour to increase as much as possible not only the Imperial taxation but also the rates. Owners of house property are used to a certain income. If the rates are put up, they put up the rent.

Therefore every increase in the rates leads, as a rule, automatically to an equivalent increase in the rent. The fact that a rise in the rates leads to a rise in the rent of houses and lodgings, and that the Socialist policy of waste and squander falls therefore most heavily not on the capitalist but on the working man, is boldly denied.

"Generally speaking, the reduction of rates is of no benefit whatever to the working cla.s.s. Rates are levied upon property.--Q. Do not the working cla.s.s pay the rates and taxes? A. No. Rates and taxes are paid out of the surplus value taken from the workers by their exploiters.

As already explained, the return to the workers, their wages, is determined by their cost of subsistence, regulated by compet.i.tion in the labour market; consequently they have nothing wherewith to pay taxes, and whether these be high or low, or whoever has to pay them directly, the position of the worker remains the same. He gets, on the average, his subsistence, that is all."[677]

Unfortunately, many working men know to their cost that the arguments given above are absolutely untrue. Whilst their wages have remained stationary, their expenditure for rent has greatly increased owing to munic.i.p.al enterprise carried on by Socialists regardless of expense, which has greatly increased rates. At West Ham "Local government was to be carried on in a way regardless of expense, and under the compounding system the vast majority of the electors were not to realise that there were such things as rates at all. One member of the Socialist party publicly declared that it did not matter to the working men of the borough how high the rates were. But the 'people'

got to see in course of time that there were drawbacks, even for them, in unrestricted Socialism. They found that, because of the increased rates, house rents were going up twelve and a half to twenty per cent., notwithstanding the threats of the Socialists that every landlord who raised his rents should have his a.s.sessments increased."[678]

Owing to munic.i.p.al enterprise directed by Socialists, "The sum-total of the rates, which stood at _6s._ in the pound in 1890 and at _8s._ _1d._ in 1896, rose to _8s. 10-1/2d._ in the pound in 1900 and _9s._ _5-1/2d._ in the pound in 1901. From that figure it advanced to _9s._ _8d._ in the pound,"[679] and to _10s. 8d._ a little later. It is an impudent misstatement of fact when Socialist leaders tell the workers, "We are not killed by rates, we are killed by rent."[680] "The whole of our munic.i.p.al expenditure is only a paltry 110 millions a year.

What do we pay in rent? Two hundred and seventy-five millions!"[681]

After all, people in other countries, where the blessings of Socialist local government are unknown, and where poverty is much rarer than in Great Britain, also pay rent. On an average the rates are 150 per cent. higher in Great Britain than in Germany.[682]

Whilst the national Government endeavours to diminish the dead weight and the heavy yearly charge of national indebtedness, Socialist local authorities vie with each other in piling up local indebtedness as fast as possible with a reckless disregard of the future. The increase of the munic.i.p.al debt, the increase of local taxation, like the increase of national taxation, has no terrors for Socialists. On the contrary, "Munic.i.p.al debt is not a burden. It is a splendid investment. We 'owe' 370 millions. Do we 'own' nothing? The munic.i.p.alities own all the roads, drains, sewers, public buildings, parks, libraries, a thousand waterworks, two hundred and sixty gasworks, three hundred and thirty-four electricity undertakings, one hundred and sixty-two tramways, two or three hundred markets, a hundred and fifty cemeteries, forty-three harbours, piers, and docks, numerous baths, washhouses, and working-cla.s.s dwellings, thousands of schools, and thousands of acres of land."[683] Since these words were written local indebtedness has increased. "We owe" now 470 millions.

Unfortunately, many of the splendid a.s.sets enumerated possess no realisable value whatever, and many munic.i.p.al enterprises are run without an adequate profit or with a loss.

The Socialist views and aims regarding local indebtedness are well summed up as follows by Suthers: "The 'munic.i.p.al debt' argument is a bogey. The greater the munic.i.p.al debt, the less private enterprise there will be. The greater the munic.i.p.al debt, the cheaper and better the public services will be. The less private capital, the less profits going into a few pockets, the richer the general public will be. Up, then, with munic.i.p.al debt."[684] These are principles which threaten to make Great Britain bankrupt. "The annual report of the work of the Local Government Board for 1907 shows that the local debt of England and Wales, from being 17 per cent. of the National Debt in 1879-80, has grown to 58.5 per cent. of the National Debt in 1904-5.

The National and Local debts have grown as follows:

1879-80 1904-5 _Increase_ National Debt 770,604,774 796,736,491 26,131,717 Local Debt 136,934,070 466,459,269 329,525,199"[685]

Unless the Imperial Government interferes, the local debt will soon be larger than the National Debt.

We have seen in the beginning of this Chapter that, as regards local government, the Socialists pursue a twofold aim: (1) To level up their districts; (2) To urge their districts to launch out into something new. Therefore we find, as Mr. John A. Fairlie says in his book on "Munic.i.p.al Administration," that "the danger of excessive debt is most serious in the smallest cities. The largest cities, while they have the largest debts, have also the largest resources, and also the best-developed financial administration. The cities of modest size, however, which attempt to equal the works of the metropolis without its available sources of revenue, are very likely to find themselves in serious difficulties."

The time may come, and it may come soon, when British local indebtedness will become greatly reduced by local bankruptcy and repudiation. That process would have no terrors for Socialists. They ought rather to look forward to it. As they demand the repudiation of the National Debt (see Chapter IX.), they should logically also strive to repudiate the local debt. A general repudiation of local debt would be the fitting and logical aim and end of munic.i.p.al enterprise.

Munic.i.p.al enterprise aims at expropriating private property-owners, who, rightly considered, are paid not in cash but in debt certificates. The repudiation of all local debts would convey gratis to the munic.i.p.ality the munic.i.p.ally managed undertakings which, rightly considered, belong to the stockholders, and would at the same time ruin the capitalists who have advanced the money for acquiring those undertakings. The Socialist policy would triumph. This would be the fitting end of a rule by irresponsible and penniless demagogues.

To the Socialist there is no limit to munic.i.p.al enterprise. Not some branches of private trade and production, but all private trade and production are to be taken over by the munic.i.p.alities. Private enterprise is to be extinguished altogether. The munic.i.p.alities are to be universal owners, manufacturers, and providers. Among the first things which Socialist munic.i.p.alities wish to control are the supply of bread, milk, coal; hospitals and public-houses, banks, fire insurances, and p.a.w.nshops.[686]

All workers are to be munic.i.p.al officials. Stretching out beyond their borders, the munic.i.p.alities are ultimately to absorb the country, and to bring it under Socialist management and government.[687]

Some of the more immediate aims of Socialism as regards London are expressed by Sydney Webb, the brilliant, but unfortunately somewhat over-imaginative, leader of British scientific Socialism, as follows:

"We see in imagination the County Council's aqueducts supplying London with pure soft water from a Welsh lake; the County Council's mains furnishing, without special charge, a constant supply up to the top of every house: the County Council's hydrants and standpipes yielding abundant cleansing fluid from the Thames to every street. When every parish has its public baths and washhouses open without fees, every Board school its swimming-bath and teacher of swimming, every railway station and public building its drinking-fountain and basin for washing the hands, every park its bathing and skating ponds--then we shall begin to show the world that we do not, after all, fall behind Imperial Rome in this one item of its splendid magnificence. By that time the landlord will be required, as a mere condition of sanitary fitness, to lay on water to every floor, if not to every tenement, and the bath will be as common an adjunct of the workman's home as it now is of the modern villa residence. And just as in some American cities hot water and superheated steam are supplied in pipes for warming purposes over large areas, we may even see the County Council laying on a separate service of hot water to be drawn at will from a tap in each tenement. Why should London's million families waste their million fires every time hot water is needed?

"The economy of fuel leads, indeed, to the munic.i.p.alised gas-supply, then laid on, as a matter of course, to every tenement, and used, not only for lighting, but still more largely for cooking in the stoves supplied at a nominal charge.

"In order to relieve the pressure of population in the centre, and reduce the rents of the metropolitan "Connaughts," the County Council tramways will doubtless be made as free as its roads and bridges.

Taxes on locomotion are universally condemned, and the economic effects of a penny tram-fare are precisely the same as those of a tax on the trip. The County Council will, however, free its trams on the empirical grounds of economy and the development of its suburban estates of artisans' dwellings, built on land bought to retain the unearned increment for the public benefit. Free trams may well imply free trains in the metropolitan and suburban area. Does not the Council already run a free service of steamboats on the Thames at North Woolwich--eventually, no doubt, to be extended all along the stream?

"Public libraries and reading-rooms in every ward are nearly here already, but we may expect that the library and the public hall will go far to cut out the tavern (at present our only 'public' house) as the poor man's club. As for bands of music in the parks, munic.i.p.al fetes, and fireworks on 'Labour Day,' and other instances of the communalisation of the means of 'enjoyment,' all this is already common form in France. The parks, indeed, will be tremendous affairs.

But when London's gas and water and markets are owned and controlled by its public authorities; when its tramways, and perhaps its local railways, are managed like its roads and parks, not for private profit, but for public use; when the metropolis at length possesses its own river, and its own docks; when its site is secure from individual tyranny, and its artisans' dwellings from the whims of philanthropy; when, in short, London collectively really takes its own life into its own hands, a vast army of London's citizens will be directly enrolled in London's service."[688]

The foregoing political and economic programme would be more creditable to an imaginative schoolgirl ten years old than to a man of science and a politician. How are all these wonderful and almost miraculous changes to be financed? Quite simply and very easily--by plunder. Mr. Sidney Webb, like most "scientific" Socialists, is a loose and shallow thinker. He forgets in his calculations that stubborn little item--human nature. He forgets that n.o.body can become richer by transferring money from the right pocket to the left. If you plunder all capitalists and all middlemen, the workers will certainly not be better off. Owing to the absence of direct self-interest, the management by salaried officials will be inefficient. All experience of management by public bodies through officials shows that public enterprise is far more wasteful and far less efficient than private enterprise; that in official management routine, sloth, waste, irresponsibility, nepotism, favouritism, and often peculation too, become supreme. Besides, far more money than is wasted now by capitalists on themselves will be wasted by politicians hankering after popularity, and after jobs for themselves and their followers and dependents. The greatest wasters in the poorest districts are the irresponsible Socialist authorities. In palatial town halls sumptuously furnished, in magnificent public libraries, in marble baths, and other outlets of civic magnificence, money wrung from the hard-worked wage-earners is wasted in far greater sums than could possibly be spent by the most reckless capitalist on his private amus.e.m.e.nt. The most magnificent town halls, &c., are to be found in the poorest districts. Besides, "salaries must be liberal enough to attract the best men to the public service."[689] It is a matter of course that the rule of irresponsible Socialist agitators, that a system of local government whereby those who have no money are enabled to spend lavishly by drawing upon those who have money, will not make for efficiency and economy, and the end will be the Poplar-ising of Great Britain. There is a generally accepted principle, "No taxation without representation." That principle requires as a supplement, "No representation without taxation." Otherwise Great Britain will be ruled by a mob headed by imaginative and dishonest demagogues.

No enterprise is too large or too costly for the Socialists. Quite recently the Fabians recommended in a leaflet that Glasgow should acquire the whole built-over ground of the city at a cost of _24,000,000l._, issuing against that sum Corporation Bonds bearing 3-1/4 per cent. interest. Provided that everything should be settled according to expectations, and supposing that Glasgow should be able to borrow _24,000,000l._ at 3-1/4 per cent., which seems extremely unlikely, there would accrue, on the most favourable showing, a net profit of _200,000l._ per annum to Glasgow, if nothing be allowed for the cost of management.[690] The possibility that that gigantic speculation might prove a failure is not even considered. On the contrary, it is a.s.sumed as certain that Glasgow will greatly profit by the growing value of land. Now if through natural economic development, or through the rule of a Socialist national or local administration, Glasgow should decline and land in Glasgow should fall in value, the town might be ruined. Of course that would not hurt the penniless Socialist agitators. Besides, there would always be the sovereign remedy of repudiation.

According to the fundamental Socialist doctrines which condemn profit,[691] "Munic.i.p.al trading does not seek profit. To the private trader the making of profits or losses is a vital matter. He makes the mistake of thinking the same motives induce a munic.i.p.ality to provide a public service."[692] To the Socialist administrators it is quite immaterial whether their enterprises are run at a profit or at a loss, so long as they can draw freely on the rich and well-to-do to pay for their extravagance. "The Socialist view of the fair way of dealing with profits on trading concerns is to have none--if one may be excused so paradoxical a statement. Fair wages and good conditions generally for the employees, and selling at cost so that all may use freely the commodity or service, is the nearest approach to justice in respect to such munic.i.p.al concerns as are incapable of being used with equal freedom by all."[693] "The only sound principle of munic.i.p.al management is to run all these things primarily for use, with no idea of making profit at all, and as far as possible at a price to the user covering the cost of the production only. Such profits as are made should be used either to extend munic.i.p.al enterprise or be utilised for what in Scotland is known as "the common good," that is, in the provision of instruction, amus.e.m.e.nts, parks and open s.p.a.ces, helpful and beneficial to all."[694]

"Munic.i.p.alisation or nationalisation must proceed on the right lines and for a practical object. What should be the object of munic.i.p.alisation and nationalisation? The primary object should be the most economical provision of the best possible public services. The general well-being should be the first consideration to be served, having due regard to the welfare of each and all engaged in these services. The idea of profit either in the shape of interest on loans, or of reduced rates and taxes, should be eliminated altogether."[695]

"The private trader always pursues profits. That is why he is such a dreadful failure. The motive of munic.i.p.al trading, on the contrary, is public welfare--the benefit of all the citizens. That is why it is such a tremendous success. No one ever thinks of criticising a town council because they make no profits on these services. Now when we consider the question of munic.i.p.al trading in gas, tramways, and electricity, is the principle involved any different? Not at all. The provision of gas, trams, and electricity is inspired by just the same motives as inspired the provision of roads, parks, libraries, sewerages, police, and education. That is to say, the benefit of all the citizens."[696] "The day may come when munic.i.p.al trams and munic.i.p.al light will be just as free as munic.i.p.al streets and munic.i.p.al libraries. That is to say, a rate will be levied on the citizens for their upkeep, and everyone will be free to use them as required."[697]

Such an ideal state of affairs, as pictured by scientific Mr. Webb and his rapacious followers, would be most desirable from the point of view of the town loafer. He would no longer monopolise the free library, the lodging-house, and the public-house corners, as he does at present. He would vary the monotony of the reading-room and the street corner by free rides up and down the town and into the country.

In the evening he would take a hot bath in the free public baths recommended by Sidney Webb, sit for a while in the free clubs recommended by the same gentleman, and then stroll out to the free public park to view the free fireworks and listen to the free music.

Free meals and lodgings will no doubt follow in due course. Great Britain will be ruled for the benefit of the tramp. Why should anybody work in such a "free" country? Who would not be a loafer or a tramp under these conditions--especially as the "vice" of work, to use a Socialistic expression, would speedily be visited by punishment in the shape of confiscatory taxation, if not of direct confiscation? The populace of decaying Athens and Rome lived under those conditions which are the ideals of British Socialists. The citizens lived by their votes for a time in idleness. They were fed and clothed by slaves and subject nations. But the end was starvation.

To provide all these free benefits for those unwilling to work, the owners of property would of course have to be taxed out of existence.

"There is no limit to the present rating powers of the local authority, nor to the taxing powers of the State. The recognised limits to local and national taxation are the needs of the respective authorities. Though not perhaps clearly or generally understood, the taxing powers of the community are based upon the principle that private property is only permitted to be held or enjoyed by individuals so long as that private possession is not opposed to the general welfare, and so long as the community does not require the property or the income for public purposes. The Socialist accepts the principle of taxation--taxation 'according to ability derived from the profits of stock-in-trade and other property'--but desires deliberately to incorporate another idea and purpose in taxation, namely, the taxation of the rich to secure such socially created wealth as is now taken in rent, interest, and profit, and to use this revenue for social reform purposes. In other words, we would by that means compel 'the rendering unto Caesar the things that are Caesar's.'"[698] Munic.i.p.al funds would be provided, not only by local rates, but also by a local income and land taxes.[699] In other words, Socialism would eat the goose that lays the golden eggs.

According to leading Socialists, munic.i.p.al enterprise is preferable to private enterprise, not only for economic but also for moral reasons.

"The system of private enterprise and compet.i.tion reeks with corruption. Honesty under it is impossible. Munic.i.p.al Socialism, on the contrary, would provide an environment which would encourage and promote the growth of moral activities. Instead of leading to corruption it would lead away from it."[700] "Private enterprise must lead to fraud, deceit, bribery, corruption, and even murder, in the struggle for existence. Munic.i.p.al Socialism would entirely remove any temptation to commit these immoral actions. Why? Because, under munic.i.p.al Socialism, every person who worked would be sure of a living."[701] We have seen some samples of the moral and purifying influence of munic.i.p.al Socialism in the investigations recently made by the Board of Trade. Unfortunately these have revealed the fact that, in many of the most advanced Socialist corporations, fraud, bribery, intimidation, favouritism, and common theft are of daily occurrence. What else can be expected when men of predatory instincts, who preach the gospel of idleness and confiscation, who live not by work but by talk, who have been accustomed to handle pence, and who have to be taught by the town clerk how to sign a cheque, are suddenly enabled to dispose of thousands of pounds and to negotiate loans?

The general public takes little interest in local elections. Most citizens abstain from voting. Therefore the numerous corporation employees often have the decisive vote in local elections, and they will support only a candidate who promises shorter hours or higher pay. Munic.i.p.al employees sitting in the public galleries will even dominate the council chamber, intimidate councillors, and shout down those of whom they disapprove. Besides, they may strike and disorganise the public services, and make the Socialistic authorities look ridiculous. Therefore it is better to humour and to obey them than to oppose them. The Fabian Society demands for munic.i.p.al servants "full liberty of combination," because "the servants of the public may often need protection against the public, as in the Post Office."[702] The results of Socialist teachings are to be seen in many munic.i.p.alities. "The servants of the public" are already, and will in an increasing degree become, the masters of the public.

Under munic.i.p.al Socialism the wages of tramway-men have increased as follows: "In Sheffield, where the private company paid _100l._ for labour, the Corporation pay _165l._ for the same amount of work. In Bolton, where the private company paid _100l._, the Corporation pay _137l._ In Wallasey, where the private company paid _100l._, the District Council pay _185l._ In Northampton, where the private company paid _100l._, the Corporation pay _120l._ In Birkenhead, where the private company paid _100l._, the Corporation pay _315l._ In Portsmouth, where the private company paid _100l._, the Corporation pay _130l._ In Sunderland, where the private company paid _100l._, the Corporation pay _145l._ When the Manchester Corporation took over the trams they paid increased wages amounting to _60,000l._ a year."[703]

The foregoing information is given by a Socialist. Some of the advances may be justified, but others, and probably the majority, have been made with that fine disregard of economy which is commonly found among men who can afford to be generous at other people's expense.

Munic.i.p.al Socialism is an ever-growing cancer which is rapidly exhausting the country.

"Half the munic.i.p.al debt is of a nature which can never yield a profit."[704] The other half is invested in enterprises many of which are run regardless of economy and of expense, regardless of profit and loss, in accordance with the Socialistic principles stated in this Chapter. The policy of deliberate waste and of constant increase of debt, the principles of "launching out into something new" and "levelling up their districts," perhaps also the fear of eventual bankruptcy and repudiation, have at last frightened the investor.

Corporation stocks can no longer be considered as safe first-cla.s.s securities. Besides, the banks have begun to refuse to accommodate Socialistic munic.i.p.alities with the necessary funds by overdrafts, short loans, &c. Socialists have therefore begun to complain when they saw that the unlimited supply of other peoples' money was diminishing.

They consider it a grievance that they can no longer arbitrarily squander on fantastic undertakings what is not their own. "The hostility of the banking interest to munic.i.p.al borrowing, and the threat to 'cut off supplies' has at length taken practical form.

Disappointed in their attempt to secure sufficiently favourable treatment from their bankers (Parr's), the Chester Corporation applied to four other banks in the city, viz. Lloyds, North and South Wales, National Provincial, and Liverpool Banks. All refused to tender for the account. The banks are not run for the public, the public are run for the bankers."[705] Also, the banks, instead of lending their funds gratis to Socialist corporations, are heartless enough to demand interest "usury" on their loans. "Unfortunately at present public bodies must pay heavy tribute as interest on borrowed money."[706]

"Our embryo Socialistic enterprises are even now suffering from the toll of interest which a restricted credit and currency permit the money lords to exact."[707]

Has the att.i.tude of the investing public and the banks caused the Socialist munic.i.p.alities to restrain their insane expenditure, and to keep it within legitimate bounds? No, they have tried to obtain money by borrowing it in small sums directly from the public. "The Corporation of Bolton, the Boroughs of Heywood, Middleton, and others, invite the investment of small sums of money in munic.i.p.al enterprise, offering a higher rate of interest on deposits than the banks can supply."[708]

Many Socialists advocate that the munic.i.p.alities should raise money by issuing paper-money in unlimited quant.i.ties or that they should become bankers, pay interest on deposits, and invest the savings of the poor in highly speculative enterprises carried on without regard to economy and expense, or to profit and loss. "Why pay in usury at all? Abolish the gold monopoly by demonetising metals, and the sole remaining argument against munic.i.p.al trading disappears along with the most crippling restriction under which public enterprise labours."[709]

"Credit notes would be of little use were the city's credit gone, because the people would be afraid to take them. However valuable the a.s.sets of a munic.i.p.al authority might be--and munic.i.p.al concerns are usually far more substantial and sound than banking companies are--it is public confidence that const.i.tutes the first requisite, and this it is the duty of all reformers to establish and maintain against the a.s.saults of those whose interest it is to break it down. The inst.i.tution of munic.i.p.al savings banks under the protection of, and subject to inspection by, the State would a.s.sist public authorities and render them less dependent on the bankers; then when people had become accustomed to thinking their city's credit at least equal to that of the leading banks, a limited issue of notes might be allowed."[710] Further proposals for "demonetising" gold and issuing unlimited amounts of unconvertible notes, on the model of the a.s.signats of the French Revolution, will be found in Chapter XX.

"Some Socialist Views on Money, Banks, and Banking."[711]

These and many other dangerous experiments could easily be undertaken by needy demagogues with fantastic ideas, if the supervision of munic.i.p.alities by the national Government were abolished. Therefore the Independent Labour Party pa.s.sed at the last Annual Conference the following resolution: "That this Conference urges the Labour party in Parliament to secure the extension of power to munic.i.p.alities, enabling them to undertake trading and the development of existing munic.i.p.al concerns, without the sanction of the Local Government Board, and to use any profits accruing from same in such manner as may be decided by the munic.i.p.ality, without the necessity of promoting Parliamentary Bills."[712]

No administration can continue for long a financial and general policy of waste and pillage, such as that followed by the Socialist munic.i.p.alities of Great Britain, without diminishing not merely private wealth but also the national wealth. The British Socialists seem determined to do all they can to destroy as fast as possible the acc.u.mulated wealth of the country and its productive power.

FOOTNOTES:

[668] _The Advance of Socialism_, p. 2.

[669] Keir Hardie, _From Serfdom to Socialism_, pp. 27, 28.

[670] Snowden, _Straight Talk to Ratepayers_, p. 8.

[671] Suthers, _Mind your own Business_, p. 148.

[672] _Fabian Essays in Socialism_, p. 157.

[673] Blatchford, _Compet.i.tion_, p. 4.