I begin by stating what is to me a proposition so self-evident that it would not be worth setting down if it were not habitually ignored or even denied in practice. My proposition is that, there is no single function discharged by the private landlord and capitalist that cannot be performed much more efficiently and satisfactorily by the organised community working through its servants.
In any newspaper we pick up, indeed in whichever direction we turn our gaze, we see proofs of the elementary and clamorous truth that all the biggest jobs and all the best work are done by combinations; by the team rather than the individual, the choir and the band rather than the soloist, by the co-operative principle in stores, associations, trusts, and mergers as against the individual capitalist, and finally by the State and the Municipality as against all smaller and necessarily less powerful organizations.
The Only Thing That Would Do.
As I write, the chairman of the Midland and Scottish Railway Group has just been proclaiming, once again, the great savings that have been effected by the amalgamation of 120 competing companies into six trusts; and a few weeks ago the newspapers featured sensationally the great chemical combine of which Sir Alfred Mond is the head. From a Tory paper, whose opinions always run counter to the facts it has to record, I read that the City of Manchester employs over 25,000 persons and spends every year £4,000,o00, meaning, of course, that the corporation is by much the largest employer in a city of large concerns. What the Tory paper does not say, but what we all know, is that the Corporation of Manchester is not only the largest employer, but the best employer; that its work is done honestly - with neither scamping of the work nor profiteering as regards the price - and that this great system of public service has arisen strictly on its merits and in spite of the opposition of vested interests to every single advance. The State and the municipality as Public Servants have grown inevitably and notwithstanding all opposition because the principle under-lying Collectivism is as sound as the prejudices underlying Individualism are unsound and have been found to be unworkable in practice. The Collectivism of the State and the Municipality has grown because it was the Only Thing That Would Do. We need only look around us to see that private enterprise is responsible for such concrete evils as the slums, mean streets, poverty, ignorance, and squalor, while public enterprise is the cleansing authority, the order-keeper, the educator, the provider of parks, art galleries, libraries, the only builder now of working-class houses, the provider of pensions, poor law relief, unemployment pay, first aid, maternity benefit, and child-welfare services.
In view of all this evil from unregulated effort and all this good received at the hands of the organised community, the Twentieth Century Puzzle is that everyone should turn to the State for his own good while deprecating the office of the State in the general life of the community. Every class looks to the State for help and furtherance, nor does it look in vain. The capitalist, boasting of the superiority of capitalism, nevertheless turns to the State for subsidies – to bread, coal, dyes, housing, farming, shipping, cotton-growing, and the treatment of sugar beet.
If it be answered that in all these cases the State gives only what it has first taken, at least it is obvious that the State has the power and the goodwill to help when of other aid there is none. But that would be the least part of the rejoinder. The fact is that the State can beat private enterprise on its own ground. Dr. Addison has made the latest public addition to our knowledge on this head. In his little book ‘Practical Socialism’ he has told us, on the basis of the public accounts of the Administration of which he was member, how the National Shell Factory at Dundee produced 18-pounder shells at 9/1, while the average contract price charged by the private firms was 20s. to 23s.; how the national factories produced tin cups at ¾d. as against the private-enterprise price of 2½d.; and how, on transactions totalling £12,000,000, the Ministry of Food, after meeting all expenses, including rationing, made a net profit of £6,391,365 (This seems excessive – fully cent. per cent.; but the figures are so given.); and how the national factories paid the cost of their erection in from two to three years.
These items are only a few additional proofs of superior efficiency and economy of public enterprise. We had already heard and read of how much cheaper corporation electricity could be produced and sold than by private companies. The very best talent is at the service of State and the Municipalities; the larger scale of production tends to greater economy; and of course the element profit for the investor is eliminated.
All that seems so obvious; and yet we proceed in ordinary industrial and commercial practice as if we had heard of none of these results. Even those who have accepted the Collectivist principle as a matter of party affiliation often argue as if they were not quite sure of the superiority of Collective practice.
Thus Mr. Ramsay MacDonald, in censuring the Government for its failure to carry out the socialising recommendations of its own Coal Commission, is acclaimed in Liberal quarters because he favoured, not outright nationalization but what he called ‘a public utility organisation imposed upon a trust organization.’ Mr. Lloyd George seized this abandonment of principle as ‘very significant,’ and Captain Wedgwood Benn was so enamoured of it that he wrote an article for the Daily News about it.
Now, there is no ‘public utility organization’ outside of public ownership and control. If Mr. MacDonald was thinking of concerns such as gas companies and railway companies, which are in different ways subject to a measure of public control, their ‘utility’ is limited to just exactly the extent that they fall short of being really controlled and operated by public servants. As I pointed out at the time Mr. MacDonald made his speech, gas companies are restricted to a five per cent. dividend, but there is no restriction upon the amount they can and do carry to reserve. I know of companies which regularly carry five times as much to reserve as they disburse in dividend. The object of the restriction - which is to keep down the price of gas - is not attained. The reserves belong to the companies. Railway rates are controlled by Act of Parliament and by the Railway Tribunal; but this does not serve the public interest in the way that national ownership has done and is doing. No private railway company in the world can show an increase in its earning capacity to compare with that which has taken place on the Canadian State Railways within the past four years, which Sir Henry Thornton, the manager, put at fifteen-fold – from 60 million dollars a-year under private enterprise to 900 million dollars a-year now.
From a recent issue of the Railway Gazette I quote the following:-
The 1925 report of the State-owned and operated Alsace-Lorraine lines shows a surplus of income over all expenditure of nearly 30,000,000 francs, which automatically goes into the Common Railway Fund. . . . The lines have the advantage of scarcely any debt, and have been realising profits ever since they were taken over from Germany. At one time there was talk of ceding them to the Est Company, but this idea has now been abandoned.
While the British railways are steadily drawing upon the reserves they accumulated during the war years, and have just raised their rates 10 per cent., the Canadian State Railway has rates to which the United States traders in vain demand approximation from the private owners of their capitalistic railways, though these serve much more densely peopled areas than do the Canadian lines. The yearly surpluses from the German and Belgian State railways, in spite of very low rates, were the subject of frequent comment till, in the immediate post-war years, the ‘interests’ were allowed to wreck these lines as a preliminary to denationalising them. To leave fare and freight charges stationary while everything else was inflated sky-high was a short and easy method of reducing them to insolvency. But the old balance sheets stand, and they show benefits to the public such as no ‘public utility organization’ could be expected to equal, or has ever equalled.
Mr. MacDonald might be expected to be more ardent than ever in the advocacy of a principle which is so satisfactory in practice and which is finding such increasing support in the constituencies. He has no mandate from the Party to suggest any form of public utility except in the form of public ownership.
Mr. Maxton Also.
But the leader of the Parliamentary Labour Party does not stand alone. Mr. James Maxton, the chairman of the Independent Labour Party, has stated the aim of his part to be the (a) ‘securing of political power by the ordinary political machine, (b) developing industrial power by the strengthening of the trade unions, and (c) increasing economic power by strengthening the co-operative movement.’
Is there not a disproportionate stressing of movements and machinery here as distinguished from what the movements and the machinery are to accomplish in the way of constructive change?
Socialism at its best surely approaches the citizen with proposals of nationalization and municipalization. To his duty as a voter it is not really necessary that the citizen should be either a co-operator, a trade unionist, or a member of the Independent Labour Party. He may, indeed, be all three and not much of a citizen. National and municipal property already much exceeds in value all that the trade unions and the co-operators can muster in the way of accumulated assets; and to many of us the business and the charm and interest of active citizenship are not enhance by their associations with the soap and clothes-pegs of co-operation or the destructive tactics of trade unionism. When Mr. Maxton writes of the ‘industrial power’ of trade unionism we recall that trade unionism as such has no industrial power. It can stop industry, but as to the starting thereof it still waits for the investor to say the word and find the money. We are too near the disastrous General Strike, foredoomed to failure as it was from the first, to be impressed with the politics of trade unionism. That the Parliamentary representatives of Labour should be free to condemn an ill-judged strike, either after it has taken place or, better still, before it takes place, has become a necessity, not only of self-respecting leadership, but of ordinary citizenship. The spirit behind all strikes - even the me forlorn hope - is right; it is the hankering after better times, a fuller life; but the time, the occasion, and the mode of a strike may be, any or all of them, foolish to the verge of crime. So long as trade unionism functions through capitalism, as it does, it depends upon the success of the capitalist in finding markets for its products. Any market-spoiling strike, therefore, is suicidal. Again, the trades unionists of Woolwich, Chatham, Clydeside, Tyneside, etc., depend upon wars and armaments. A good Socialist wants wars and armaments abolished, and the thousands who live by these anti-social industries set to plough and sow and plant and build houses and make roads and develop electricity. But the good Socialist may well have grave doubts as to how far the confirmed city workman is prepared to travel along the road of de-urbanised progress. A man of so such social goodwill as John Galsworthy pictures two down-and-out city men as supremely miserable when taken out of their slums and set to work at poultry farming. One of them hangs himself because he feels he is degraded by the work and life to which he has been set. This is so much in accordance with what one hears of working-class opinion – even Socialist opinion - that one is not greatly heartened trade union alliance by which Mr. Maxton sets so much store.
Nationalization and Municipalization.
The good Socialist is so fully persuaded of the cogency and ultimate necessity of nationalization and municipalization that he is inclined to urge its acceptance upon all classes. He may do this hopefully and without misgiving, recollecting that the national and municipal services and property we have been secured with the assent and furtherance of citizens of all classes, sometimes in spite of the opposition of Labour men. Thus when the very successful Hull telephones were municipalised the Labour councillors voted against, while a Labour Government dismantled the nationally owned town of Gretna, which the Coalition had built.
It very evidently needs to be repeated that nationalization and, municipalization are the essence of Socialism beyond and above co-operation, trade unionism, or even the Parliamentary Labour Party.
This is the more necessary in view of the wobbling one sees in all quarters. The man who is very sure of the justice and ultimate necessity of his principles must always be sorry that matters of good citizenship should become party cries and arouse a merely partisan opposition; but if this is inevitable - human nature being what it is - at least let us be sure that the end is not lost sight of in the means. There seems to be some danger of that in the meantime.
Even ‘The Social Democrat.’
If we might be prepared for a certain amount of trimming from the politicians of the I.L.P. (who always were politicians first and Socialists some way after), we might expect the Old Guard of the Social-Democratic Federation to be firm in the Socialist faith. I find, however, in two recent numbers of The Social-Democrat, the monthly organ of the S.D.F., a series of articles by the editor, Mr. Fred Montague, that give rise to some slight misgiving. In the December issue Mr. Montague, answering the question, ‘Can Capitalism Resolve its Contradictions?’ says:-
There is no more essential difference between nationalization in and by a capitalist State and trustification than there is between the high wages of Fordism and the wage demands of the Minority Movement or the I.L.P.
Let me say at once that I do not believe in ‘the wage-demands of the Minority Movement or the I.L.P.’ I do not say we could not have a State based upon the idea of capital and labour with their shares of the product regulated on a system of fixed percentages allocated by public officials on the ledger-evidence of the business done. But anything of the kind would be, not Socialism, but an artificial, complicated, empirical Individualism. Under such a system we should still have wasteful competition, the often incompetent management of private enterprise, the appalling workplaces which private enterprise thinks good enough for its workmen, and, among much else, probably a good deal of fraudulent book-keeping. Individualism, as a business bungle, is not worth preserving, and a system such as is indicated by Messrs, Hobson and Brailsford in ‘The Living Wage’ would be immensely more difficult to secure and cumbrous to run than Socialism pure and simple. The idea of it could have suggested itself only to men who either do not believe in socialization or who despair of ever securing it. It is worth noting that those who propound wire-drawn schemes of this kind are men of the study who do not take active part in public work and have no adequate sense of political possibilities. The working class is not incapable of taking a political lead if we do not darken counsel by the constant launching of novelties.
Between Henry Fordism and ‘The Living Wage’ policy there are the immense differences that Henry Ford pays high wages voluntarily, whereas the I.L.P. demands high wages compulsorily; that Henry Ford is a genius working a specialty, while the average employer is neither the one nor the other; and that Ford is working in and for a land of high wages, while the British capitalist is working for a poor Britain and a still poorer Europe. The Living-Wage policy assumes the continuance of Britain as a manufacturing and exporting country, whereas nothing can be clearer than that the outside world is more and more doing without our products and that every year we shall export less and less. I waive the mean-spiritedness that would seek to shirk the responsibility of communally organising production and distribution, but would leave it to the capitalist.
When we come to Mr. Montague's statement that there is no ‘essential difference between nationalization in and by a capitalist State and Trustification,’ we can offer only a complete negative.
If we take the Post Office as an example of nationalization, and the Thread Combine as a type of the Trust, we see the ‘essential difference’ at once. The Thread Combine keeps prices up; the Post Office keeps prices down. The Thread Combine pays low wages; the Post Office pays wonderfully good wages, having regard to the nature of the work; it pays for holidays, gives medical attendance, uniforms, superannuation allowance, and the marriage ‘dot’ to clerkesses who wed. No one of these privileges is a feature of work for the Trust. The Trust dispenses millions in profits, and its directors are millionaires; whereas the Postal Service is the least remunerative of all public undertakings, doing an immense amount of work for the poor in old age and other pensions for nothing. The index figure still stands at 70 odd; but postal rates have never been more than 50 per cent. above the 1913 figures. The Post Office loses money on press telegrams professedly in the public interest; but what Trust runs any part of its business deliberately at a loss? The Post Office is amenable to public and Parliamentary criticism. The Postmaster-General is an elected public servant; but none of these considerations applies to the Trusts. The Post Office is public property; the Trust is not. The Post Office has no motive to profiteer. The Trust has profiteering as its sole real existing.
The comparison is so hopelessly wrong that it may be taken as a type of a certain unfair and unwise attitude towards nationalization. In his editorial notes in the January number Mr. Montague, in the course of a long and very debatable passage, says:
We are not bound by any ‘doctrine’ to support any and every form of capitalist State management, irrespective of considerations of efficiency, against forms of capitalist ownership which may in actual fact contain more socialization in embryo, neither are we called upon to prove that State ownership ‘pays.’
This, surely, is coming to bury Caesar rather than to praise him. I do not know what the writer means. State and municipal ownership do pay. State management is efficient. There may be more ‘socialization in embryo’ in the Brunner-Mond Merger than there is in the Post Office; but it will take a lot of looking for.
Mr. Montague for the S.D.F., Mr. Maxton for the I.L.P., Mr. MacDonald for the Parliamentary Labour Party, either believe in nationalization or they do not. If they do they are dissembling their love with some considerable success.
There have, of course, been failures in both State and Municipal enterprise: Stubbs’ Gazette is full of the failures of private enterprise every week. Any business may fail if improperly handled or if industrial conditions change. But nothing can seriously invalidate the main advantages of public enterprise, namely, that a public concern can borrow money cheaply; can free the field from competition, as where corporation cars ran private buses off the streets; can secure the best managing talent; has claims on public support; and has no dividends to find for shareholders. Direct labour on the roads, in housebuilding, in the works departments of local imperial authorities has been a success all along the line as against capitalism. Every week brings its tale of Collectivist success. This week it is the report of £300,000 saved in five years by the Government Printing Works.
If Mr. Lloyd George comes forward as the advocate of State enterprise, and cites facts and figures making good his claims, why should professed Socialists cast doubt upon their own principles? Speaking in the House of Commons while Premier (18th August, 1919), he said, after dealing with economies effected in the making of shells, guns, machine-guns and rifles:-
When we took them [Lewis guns] in hand they cost £165, and we reduced them to £35 each . . . Through the costing system and the checking of the National Factories we set up, before the end of the war there was a saving of £440,000,000. . . . The Controller of Shipping saved hundreds of millions to this country. When you have to spend between £8,000,000,000 and £1o,000,000,000 of this country’s money, when you improvise great organisations, find your men where you can, find thousands of absolutely new men to work out these schemes, of course there may be extravagance, of course there may be errors of judgment. . . . But whatever is said about these little mistakes? I have seen the report of Parliamentary Committees. They are about comparatively small sums – I mean comparative to the gigantic expenditure. Those are advertised; those are flaunted. Leading articles are written about them. Never a word about these hundreds of millions that have been saved by these men! . . . Is it wise, when attacks are made upon systems of government . . . when all government is being challenged, if you get the democracy to believe that you get nothing but mistakes, nothing but what they call scandal, and there is no efficiency anywhere, how long do you think any system or institution can possibly continue in this country?
If Mr. Lloyd George has forgotten these triumphs of nationalization, why should we? Their value as object lessons is as great as ever. And in such advocacy Mr. Lloyd George is talking more like a Socialist than is the Editor of The Social-Democrat, though I believe Mr. Montague is normally a capable and spirited man. When Sir Eric Geddes pointed out (Times, 11/12/19) that the Woolwich Arsenal produced 12-ton wagons £100 cheaper than the profit-making builders, he also was talking more like a Socialist than do professed Socialists when depreciate State enterprise.
Even with a Tory Government in power we have had two instalments of nationalization carried within one year, the chief objection to the Broadcasting and Electricity schemes being that they are not Socialistic enough. If we had a Socialist Government in power, how much faster might not the process of socialization go forward? And not merely a Socialist Government at Westminster, but local bodies more and more composed of Socialists.
Mr. Montague writes of ‘vast hordes of officials,’ as if under Socialism we should not have many fewer officials than now. An official is a man in office, and there are more offices and consequently more officials now than there would be under a more consolidated system of production and distribution. The officials, moreover, would not only know their job, but would be amenable to the public. They are not always capable now, and owe no responsibility to anyone save their employers, who are usually just amateur directors.
As it is, men of goodwill welcome the experienced men of the Ministry of Health, who correct the ignorance and conservatism of local authorities. Personally I am always glad to see the Factory Inspector, from whom I have repeatedly got good suggestions and much useful information such as a travelled man seeing many workplaces might be expected to possess.
Great Immediate Schemes.
We are on the threshold of great public undertakings. With the mines nationalised, there will be subsidiary industries for the production of coke, tar, heavy oil, petrol, and gas for long-distance distribution under national auspices. National electricity from falling water can be made successful only under real national control from start to finish. House-building by national companies of masons - a building army! - could provide houses by the thousand in the new districts to be opened up in connection with the electricity works, schemes of afforestation, the making of new arterial roads, and the provision of cottages and farm buildings in connection with the overdue agricultural and horticultural developments required to keep in the country the hundreds of millions that go abroad for foodstuffs we might economically produce ourselves.
Nothing save State ownership, expert management, abundant capital, and the grand, hopeful scale of State enterprise can arrest the deterioration of the Homeland. There is in Britain capital to burn. It is being wasted on risky foreign investments and on a hundred and one bubbles such as the buses that crowd our streets and roads, endanger the lives of the people, poison the atmosphere with petrol fumes, and eat up the savings of many simple souls who embark in a grossly overdone industry. In spite of the coal lockout and the General Strike, the new capital issues in Britain during 1926, exclusive of Government loans, were of the value of £253,266,000.
France, with a much lower population, has 8,000,000 employed in agriculture and forestry, as compared with a million and a quarter in Britain. Naturally France has no unemployed and no emigration to speak of, while we, in the week in which I write, have 140,000 more unemployed than a week ago, and a quarter of a million more than in the corresponding week of last year.
The electorate is more and more with the Labour Party, which stands for national ownership and control whatever some of its spokesmen may say. On the test of work done and results achieved, even by middle-class local and national government, we can go forward confidently with a programme which aims at making democracy master in its own house, owning the house and using all that belongs to it, instead of sponging upon capitalist organization and being mastered and driven by the blind and chaotic forces of greed and mismanagement. It will be no leap in the dark to extend the social services and develop our neglected country on lines that have proved so successful, to the limited extent they have been followed.
The Co-operative Commonwealth.
The Living Wage, like the Right-to-Work slogan of some years ago, is a novelty hatched by impatient people not weaned from Individualism. Co-operation is a side-show sometimes flattered by being called ‘a State within the State.’ Guild Socialism is the smallest of small stunts. The State can gulp all these without a cough, and serve the nation better for their absence. What’s the matter with Britain Unlimited, with international affiliations? - the Co-operative Commonwealth? Nothing else and nothing less will serve; and if make up our minds we may have it. The greater includes the less, my brethren; the whole is greater than the part.
We shall need new forms of Government, local and nation to run the Co-operative Commonwealth. These will come as the State and the Municipality add to their functions. Manchester City Council, with its 140 members functioning through 20 committees, has grown up entirely since the day of Richard Cobden, and it is a type of what will extend more and more in Manchester as elsewhere. We want as many citizens may be desirable actively and intelligently participating in the work of government - political, industrial, commercial - taking the most capable men out of their little shops and offices to lend a hand in bigger business.
Not a Negation.
Socialism is not merely or primarily a criticism of capitalism, but an affirmation of the power and beneficence of Society organised. It is not a thing of negations, denials, a defeatism, but a constructive policy, already very successful, that would bring all social functions within the Reign of Law and Order, enormously increasing the wealth, health, resources and powers of man united at last for peace and its victories. Its coming will be gradual: all growth is gradual. But it may be as steady and as rapid as intelligence, determination, and goodwill can make it.
To find past articles please use monthly archives.