"The workingman is no fool. He knows that a great party like ours can, with his help, do things for him he could not hope to accomplish for himself without its aid. It brings to his a.s.sistance the potent influences drawn from the great middle cla.s.ses of this country, which would be frightened into positive hostility by a _purely cla.s.s organization_ to which they do not belong. No party could ever hope for success in this country which does not win the confidence of a _large portion_ of this middle cla.s.s....

"You are not going to make Socialists in a hurry out of farmers and traders and professional men of this country, but you may scare them into reaction.... They are helping us now to secure advanced Labor legislation; they will help us later to secure land reform and other measures for all cla.s.ses of wealth producers, and we need all the help they give us. But if they are threatened with a cla.s.s war, then they will surely sulk and harden into downright Toryism.

What gain will that be for Labor?" (My italics.)[44]

The Chancellor of the Exchequer here bids for Labor's political support on the plea that what he was doing for Labor meant an expense and not a profit to the middle cla.s.s, and that these reforms would only be a.s.sented to by that cla.s.s as the necessary price of the Labor vote. I have shown grounds for believing that the chief motives of the new reforms have nothing to do with the Labor vote. However much Mr. Lloyd George, as a political manager, may desire to control that vote, he knows he can do without it, as long as it is cast _against_ the Tories.

The Liberals will hold the balance of power, and their small capitalist followers will continue to carry out their capitalistic progressive and collectivist program--even without a Labor alliance. Nor does he fear that even the most radical of reforms, whether economic or political, will enable Labor to seize a larger share of the national income or of political power. On the contrary, he predicted in 1906 that it would be a generation before Labor could even hope to be sufficiently united to take the first step in Socialism. "Does any one believe," he asked, "that within a generation, to put it at the very lowest, we are likely to see in power a party pledged forcibly to nationalize land, railways, mines, quarries, factories, workshops, warehouses, shops, and all and every agency for the production and distribution of wealth? I say again, within a generation? He who entertains such hopes must indeed be a sanguine and simple-minded Socialist."[45]

Mr. Lloyd George sought the support of Labor then, not because it was all-powerful, but because, for a generation at least, it seemed doomed to impotence--except as an aid to the Liberals. The logic of his position was really not that Labor ought to get a price for its political support, but that _having no immediate alternative_, being unable to form a majority either alone or with any other element than the Liberals, they should accept gladly anything that was offered, for example, a material reform like his Insurance bill--even though this measure is at bottom and in the long run purely capitalistic in its tendency.

And this is practically what Labor in Great Britain has done. It has supported a government all of whose acts strengthen capitalism in its new collectivist form, both economically and politically. And even if some day an isolated measure should be found to prove an exception, it would still remain true that the present policies _considered as a whole_ are carrying the country rapidly and uninterruptedly in the direction of State Capitalism. And this is equally true of every other country, whether France, Germany, Australia, or the United States, where the new reform program is being put into execution.

Many "Socialistic" capitalists, however, are looking forward to a time when through complete political democracy they can secure a permanent popular majority of small capitalists and other more or less privileged cla.s.ses, and so build their new society on a more solid basis. Let us a.s.sume that the railways, mines, and the leading "trusts" are nationalized, public utilities munic.i.p.alized, and the national and local governments busily engaged on ca.n.a.ls, roads, forests, deserts, and swamps. Here are occupations employing, let us say, a fourth or a fifth of the working population; and solvent landowning farmers, their numbers kept up by land reforms and scientific farming encouraged by government, may continue as now to const.i.tute another fifth. We can estimate that these cla.s.ses together with those among the shopkeepers, professional elements, etc., who are directly dependent on them will compose 40 to 50 per cent of the population, while the other capitalists and their direct dependents account for another 10 per cent or more. Here we have the possibility of a privileged _majority_, the logical goal of "State Socialism," and the nightmare of every democrat for whom democracy is anything more than an empty political reform. With government employees and capitalists (large and small)--and their direct dependents, forming 50 per cent or more of the population, and supported by a considerable part of the skilled manual workers, there is a possibility of the establishment of an iron-bound caste society solidly intrenched in majority rule.

There are strong reasons, which I shall give in later chapters, for thinking that some great changes may take place before this day can arrive.

FOOTNOTES:

[35] William Allen White in the _American Magazine_, January, 1911.

[36] Dr. Lyman Abbott in a series of articles published in the _Outlook_, 1910, ent.i.tled "The Spirit of Democracy," now in book form.

[37] _New York Journal_, Aug. 2, 1910.

[38] The _Outlook_, Sept. 10, 1910.

[39] In his enthusiasm for these undemocratic measures, Dr. Abbott has retrogressed more than the Southern States, which do not require both a property and educational qualification, but only one of the two.

Moreover, by the "grandfather" and "understanding" clauses they seek to exempt as many as possible of the whites, _i.e._ a majority of the population in most of these States, from any substantial qualification whatever. Nor does it seem likely that even in the future they will apply freely; against the poor and illiterate of the white race, the measures Dr. Abbott advocates. Just such restricted suffrage laws were repealed in many Southern States from 1820 to 1850, and it is not likely that the present reaction will go back that far.

[40] The _Outlook_, May 24, 1911.

[41] Governor Woodrow Wilson, Speech in Portland, Oregon, May 18, 1911.

[42] Speech in Senate, May 24, 1911.

[43] Miss Jessie Wallace Hughan in her "American Socialism of the Present Day" (page 184) has quoted me as saying (in the _New York Call_ of December 12, 1909) that the amendability of the Const.i.tution by majority vote is a demand so revolutionary that it is exclusively Socialist property. Within the limitations of a very brief journalistic article I believe this statement was justified. It holds for the United States to-day. It does not hold for agrarian countries like Australia, Canada, or South Africa, for backward countries like Russia, or dependent countries like Switzerland or Denmark, where there is no danger of Socialism. And before it can be put into effect, which may take a decade or more, the increased proportion in the population of well-paid government employees and of agricultural lessees of government lands and similar cla.s.ses, may make a democratic const.i.tution a safe capitalistic policy, for a while, even in the United States.

[44] Lloyd George, _op. cit._, pp. 33, 34.

[45] Lloyd George, _op. cit._, p. 35.

CHAPTER IV

"STATE SOCIALISM" AND LABOR

State Capitalism has a very definite principle and program of labor reform. It capitalizes labor, views it as the princ.i.p.al resource and a.s.set of each community (or of the cla.s.s 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 cla.s.ses.

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 a.s.suming 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 cla.s.s 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 att.i.tude 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 cla.s.ses, and the foundation of the new policy is to be the welfare of society as these other cla.s.ses conceive it,--and not the welfare of the ma.s.ses of the people as conceived by the ma.s.ses 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 a.s.suring 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 ill.u.s.tration 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 cla.s.s 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 a.s.surance, 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 a.s.set 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 ama.s.s 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 acc.u.mulating 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 ma.s.ses 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 cla.s.s_. 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 acc.u.mulated 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 a.s.set, of the government. This paternal att.i.tude towards the individual, however, is not at all similar to the paternalist att.i.tude 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 cla.s.s 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 a.s.set of the State, even while the latter is still viewed primarily as a commercial inst.i.tution and remains in the hands of the business cla.s.s, 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 cla.s.ses. 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 compet.i.tion 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 ma.s.ses of the people better off, "State Socialists" will apparently be satisfied.