The Society of To-morrow: A Forecast of Its Political and Economic Organisation

Gustave de Molinari
Molinari, Gustave de
(1819-1912)
BIO
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Editor/Trans.
P. H. Lee Warner, trans.
First Pub. Date
1899
Publisher/Edition
New York: G. P. Putnam's Sons
Pub. Date
1904
Comments
Appendix by Edward Atkinson, Introduction by Hodgson Pratt, Prefatory letter by Frédéric Passy.
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Part I, Chapter VI

Consequences of the Perpetuation of the State of War

I.6.1

As long as war was the necessary guarantee of security— guarantee whose failure must have continually reduced human societies to a state akin to mere animalism—the sacrifices which it entailed, and the losses which it caused, were amply compensated by its contribution towards the permanence of civilisation. But this compensation has ceased to exist since the powers of destruction and production, attained under its impulse, assured a decisive preponderance to the civilised nations. More, the very progress of which war was the prime agent has increased its burden. Modern war entails a greater expenditure of life and capital, and, directly or indirectly, greater damage. And even if it is impossible to calculate the sum of these losses and this expense, we can obtain some idea of their bulk by a summary survey.

I.6.2

We need do little more than note a few figures. The various States of Europe have accumulated a debt of 130 milliards of francs (£5,200,000,000), of which the goodly sum of 110 milliards (£4,400,000,000) was added during last century. Practically the whole of this colossal total was incurred on account of wars. The army of these same nations numbers more than 4,000,000 men in time of peace; on a war footing it reaches 12,000,000. Two-thirds of their combined budgets are devoted to the service of this debt, and to the maintenance of their armed forces by sea and land. When we turn to the rate at which public charges have increased during the century, we find that the total monetary contribution has advanced 400 or 500 per cent., and that the "blood-drain" among Continental nations has followed on an almost identical scale.

I.6.3

In the particular case of France, the budget now stands at four milliards of francs (£160,000,000) as against one at the time of the Restoration; during the same period the figure of the annual conscription for the army has been increased from 40,000 to 160,000 men. Other States have suffered a very similar addition to their burdens, and in every case the second half of the nineteenth century was marked by a higher rate of increase.

I.6.4

It is true that the population of Europe has doubled since the year 1800, and that the marvellous inventions which have revolutionised every branch of productive industry have enlarged its productive capacity to an even greater extent. Hence, although available statistics are admittedly faulty, we may allow that productive capacity has developed concurrently with the exactions on output. The rate of taxation continues to rise, but there are signs that the rate of industrial production is beginning to flag. When, as of late, the figures of the birth rate, of general commercial circulation, and of the yield of taxation, exhibit a considerable slackening, it is clear proof that the general production of wealth is suffering a check. Meanwhile the causes which govern an advanced scale of imposts exhibit no retrogressive tendencies, and there are no grounds for supposing that the State of War will, in the twentieth century, fail to maintain a rate of advance at least equal to that shown in the nineteenth.

I.6.5

It is, therefore, a question whether the taxes which have met that expenditure, and the service of those debts, will continue to suffice. If, for example, France cannot support a budget of eight milliards of francs (£320,000,000), and the service of a debt of sixty milliards (£2,400,000,000) upon her present taxes, the deficit must be made good by an increase in their assessment or the imposition of new imposts. But the laws of fiscal equilibrium set a strict limit to the degree within which it is possible to impose new taxes, or to increase the rates of those already in force. The relative productivity of taxes soon shows when this point has been overstepped, for then returns not only cease to rise, but immediately begin to fall. A continuance of the State of War therefore, means that a moment will come when the governing class will, itself, be stricken at the very sources of its means of subsistence.

I.6.6

But the growing burdens of military expenditure are not the only trouble imposed by a continuance of this system. Equally injurious is the necessity which it entails of continuing to endow governments with a sovereign power of disposition over the life and property of the subject. War acknowledges no limit to the sacrifices which it may demand of a nation, and governments must necessarily have an equal power of compelling those sacrifices. The hereditary chief of the oligarchy, which owned the political organisation under the old system, possessed this power absolutely. The new order theoretically transferred it to the nation, but its practical exercise was invested in the leaders of the party in temporary and precarious possession of office. We have already seen that this transfer resulted in increased abuse of the sovereign power, and that all guarantees erected for the protection of the individual proved ineffectual. Whatever the intentions of a government, its tenure of office is so uncertain that party interest must be its first care.

I.6.7

Rulers, under the old system, had only to consider an oligarchy in hereditary possession of the superior political functions, military and civil. If this oligarchy condescended to inferior functions, much more to the servile practices of industrial and commercial life, it abdicated its position. Its demands on government were exacting, but were confined within narrow natural limits. High office was hereditary in a few families, and the sovereign's obligations were fulfilled when he had satisfied their ambition and cupidity. Modern government has to satisfy a vastly greater number of equally hungry suitors. Whereas it was sufficient to find honourable positions and sinecures for the members of the few families which constituted the oligarchy, a modern State has to satisfy thousands, one may say hundreds of thousands of families, all possessed of political power and influence. These men seek every kind of place, and press every kind of interest, and can only be satisfied at the expense of the rest of the nation. Policy and protection—of certain classes or certain interests—are added to militaryism as burdens of the body politic. These charges on production, shared by the State and its protégés, may be added to, or subtracted from, the share of the actual agents of production—capital and labour. They are added when the producer is enabled to increase the price of his product by the entire sum of the tax, as occurs when a country protects a home product from the competition of other countries whose producers are less burdened. The impost is, in this case, paid by the consumer, and—whether derived from invested capital or from direct labour—the purchasing power of his income is correspondingly diminished. The manufacturer is, however, a consumer, and also—in that capacity—a sufferer from the results of a protective duty. But the manufacturer of a protected article—and his sleeping partners, if he have them—is usually able to obtain advantages which more than balance his decreased capacity of consumption. The combined burdens of tax and impost duty therefore fall upon the masses, the men whose labours are unprotected.

I.6.8

External competition sometimes prevents producers from increasing the price of their product by the full amount of a protective duty. The share of profits claimed by the State must, in this case, be subtracted from the shares of the agents of production. As the burden of taxation is rising at a practically concurrent rate among all nations, this case may be considered exceptional.

I.6.9

The nature of capital saves it from this deduction from the shares of the agents of production. Capital is itself a fruit of production, and production is only an incidental of its real intention. Capital is formed as an insurance against the eventualities of life, and suffers no diminution from an indefinite existence. It becomes productive—is applied to productive purposes, only when such application yields a sufficient return to cover the privation consequent on such employment, to counterbalance the accompanying risk, and to provide a profit. When returns do not cover this deprivation, risk, and profit, capital is withdrawn from, or ceases to enter, the field of production. Government can reduce the spheres open to capital by imposing burdens upon those spheres, but it has no power of reducing the rate of profit necessary to bring capital into the field of production.

I.6.10

Labour—the second agent of production—has no such power of self-protection. It must employ itself in production or lack the immediate necessities of subsistence. Unless it can emigrate to countries less burdened—always a difficult and costly operation—the share of labour is inclined to supply the demands of government and its protégés. It is this increasing deduction [by the State] from the share of labour in the fruits of production, which socialists attribute to capital. They maintain that the remuneration of labour has not risen in proper proportion to the enormously increased returns of production, because capital has used its power to seize most, if not all, of the rightful dues of the worker. They have therefore stirred up strife between the two essential factors of production—an action which inevitably aggravates all that it pretends to cure.

I.6.11

Labour does suffer from grave ills, but so far are these from being solely due to insufficient remuneration that the worker has, in many cases, only to thank his own incapacity for the right conduct of life. Faults in the administration of the State are aggravated by the evils in individual self-government: the former do not cause the latter, but they do hinder their cure.

I.6.12

The sovereign power of governments over the life and property of the individual is, in fact, the sole fount and spring of militaryism, policy, and protection. The rationale of the survival of this power is that we still live in a State of War, and the abolishment of that "state" is the present, most urgent, need of society. The solution is natural and inevitable, since the new conditions of social existence daily become more incompatible with its continuance. But, meanwhile, we can hasten the impulse, and so hasten likewise the realisation of that progress which the State of Peace will render possible.*8


Notes for this chapter


8.
This subject will be found, more fully developed, in the author's "Grandeur et Décadence de la Guerre."

End of Notes


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