A Policy of Free Exchange: An Argument Against Socialism and Socialistic Legislation
By Thomas Mackay
Thomas Mackay (1849-1912) was a successful English wine merchant who retired early from business so he could devote himself entirely to the study of economic issues such as the Poor Laws, growing state intervention in the economy, and the rise of socialism. Mackay was asked by the individualist and laissez-faire lobby group, the Liberty and Property Defense League (founded in 1882 by the Earl of Wemyss), to put together a collection of essays by leading classical liberals to rebut the socialist ideas contained in
Fabian Essays in Socialism edited by George Bernard Shaw in 1889. The result was a volume of essays called
A Plea for Liberty: An Argument against Socialism and Socialistic Legislation which appeared in 1891, and another volume of essays
A Policy of Free Exchange: Essays by Various Writers on the Economical and Social Aspects of Free Exchange and Kindred Subjects, which appeared in 1894.Two of the guiding intellectual lights of the Liberty and Property Defense League were Herbert Spencer (1820-1903), whose
The Man versus the State had appeared in 1884, and Auberon Herbert (1838-1906), whose
The Right and Wrong of Compulsion by the State had appeared in 1885. Both Spencer and Herbert were troubled by the direction in which the British Liberal Party was heading, away from strict adherence to policies of individual liberty and non-intervention in the economy and towards a “New Liberalism” which laid the intellectual foundations for the modern welfare state. The aim of Mackay and the members of the Liberty and Property Defense League was to use the occasion of the publication of a major defense of state interventionism in the economy, the
Fabian Essays, as an opportunity to oppose all advocates of these policies whether from the “right” (the Liberal Party) or the “left” the Fabian socialists and the Labour Party. The result were the two volumes mentioned above. The strategy adopted was to argue against both the morality and the practically of socialism. The latter resulted in many essays showing how specific examples of state intervention or control, such as electrical distribution or public housing, led to unintended, harmful consequences.The ideas expressed in the two volumes,
A Plea for Liberty and
A Policy of Free Exchange, are still timely even after the passage of some 110 years. In spite of the fall of communism and the discrediting of the idea of a centrally planned economy, myriad government interventions in the operation of the economy are still with us, seemingly entrenched and impossible to remove. It is thus interesting to see the response to socialism by free market people who were present at its birth.Dr. David M. Hart
Library of Economics and Liberty
December, 2002Recommended ReadingEric Mack,
“Foreword” to Herbert Spencer,
The Man versus the State, with Six Essays on Government, Society, and Freedom (Indianapolis: LibertyClassics, 1981).Eric Mack, “Introduction” to Auberon Herbert,
The Right and Wrong of Compulsion by the State, and Other Essays (Indianapolis: LibertyClassics, 1978).Jeffrey Paul, “Foreword” to
A Plea for Liberty: An Argument against Socialism and Socialistic Legislation, consisting of an Introduction by Herbert Spencer and Essays by Various Writers, edited by Thomas Mackay (1891) (Indianapolis: Liberty Fund, 1981).Edward Bristow, “The Liberty and Property Defence League and Individualism,”
The Historical Journal, 1975, vol. XVIII, no. 4, pp. 761-789.N. Soldon, ”
Laissez-Faire as Dogma: The Liberty and Property Defence League, 1882-1914″, in
Essays in Anti-Labour History: Responses to the Rise of Labour in Britain, ed. Kenneth D. Brown (Macmillan, 1974), pp. 208-233.J. W. Mason, “Thomas Mackay: The Anti-Socialist Philosophy of the Charity Organisation Society,” in
Essays in Anti-Labour History: Responses to the Rise of Labour in Britain, ed. Kenneth D. Brown (Macmillan, 1974), pp. 290-316.J. W. Mason, “Political Economy and the Response to Socialism in Britain, 1870-1914,”
The Historical Journal, 1980, vol. XXIII, no. 3, pp. 565-587.
Thomas Mackay, ed.
First Pub. Date
New York: D. Appleton and Co.
Collected essays, various authors.
The text of this edition is in the public domain.
- Preface, by Thomas Mackay
- The Science of Economics and its relation to Free Exchange and Socialism, by Henry Dunning Mac Leod
- The Coming Industrial Struggle, by William Maitland
- National Workshops, by St. Loe Strachey
- State Socialism and the Collapse in Australia, by the Hon. J. W. Fortescue
- The Influence of State Borrowing on Commercial Crises, by Wynnard Hooper
- The State in Relation to Railways, by W. M. Acworth
- The Interest of the Working Class in Free Exchange, by Thomas Mackay
- The Principle of Progression in Taxation, by Bernard Mallet
- The Law of Trade Combinations, by the Hon. Alfred Lyttelton
by St. Loe Strachey
‘WE are tired of abstractions. Let us come to realities.’—That is the cry of the modern Socialists when they are confronted with the disquisitions of the older school of Economists. So be it. Let us try and test Socialism and its theories, not by counter theories but by facts. The Socialists have a great many doctrines and counsels of perfection, but their essential principle of practice is contained in the formula which declares that society will only be successfully and happily organized when the sources of wealth and the machinery of production are in the hands of the State—when, that is, the machinery of production is either nationalized or municipalized, and when the community, not the individual in competition, undertakes the production of all the things which man needs, from his clothes to his daily newspaper. When we are confronted with this theory, with the declaration that it ought to be put in practice, and with the demand that it shall be combatted, if it is combatted, with facts, not abstractions, the first thing we must ask is, What does the experience of the past teach on the subject?—has the plan of making the community the producer and the manufacturer the owner of the machinery of industry and production ever been tried before? The answer is Yes. It has been tried, and was a failure. When did that trial take
place? In Paris in 1848, when, under the supervision of the Provisional Government, which accepted the doctrines of modern Socialism, a serious and practical attempt was made to inaugurate the era of State employment and State production. The history of the national workshops of 1848 is, then, whatever its teachings, of the utmost importance to those who are anxious to consider, fairly and reasonably, as I trust I am, the proposals of the Socialists of to-day. If the proposals of the Fabians would solve the social problem, abolish poverty and misery, and build a new heaven and a new earth, I, like every one else I ever heard of, would be a Socialist, and would adopt the doctrine of the nationalization of the sources of production. ‘God hates the poor, and justly punishes them for their wickedness,’ is not a doctrine that has ever been seriously held, though it is, I am aware, often represented as the Anti-Socialist’s gospel. The question is, Would the realization of Socialism mend matters, or would it not rather make them worse? That is the problem which I propose to consider in the light of the experience of the national workshops of 1848.
Perhaps it will be said that the Parisian experiment of fortyfive years ago is no guide, because the men who set up the
Ateliers Nationaux did not really adopt the Collectivist theory, or because, even if they did, they did not apply it properly, i.e. give the scheme a fair trial. Therefore, it will be urged, the doings of 1848 throw no light on the subject. I accept the challenge. If the precedent is to apply, the intention must have been genuinely Socialistic, and the experiment must have been made consciously and deliberately, and not merely haphazard. Before, then, beginning to read a lesson from the national workshops, it is necessary to show (1) the Socialistic intent of the founders of the
Ateliers Nationaux, (2) the fact that they did their best to make the workshops a success. The readiest way of establishing the truth of the first of these propositions is to quote verbatim the Decree of the Provisional Government, in which they laid down the principles that guided
them in their dealings with the social problem. Here is the Decree:—
February 28, 1848.
Seeing that the revolution made by the people should be also for the people;
That it is time to put an end to the long and iniquitous sufferings of the workers;
That the question of work is of supreme importance;
That there is no question greater or more worthy of the consideration of a republican government;
That it specially behoves France to carefully study and to solve a problem at this moment before every industrial nation in Europe;
That means must at once be devised to guarantee to the people the legitimate fruits of their toil;—
The Provisional Government of the Republic decrees:
That a permanent Committee, to be called
Government Committee for Workers, shall be nominated, with the express and special object of watching over the workers. To show what importance the Provisional Government of the Republic attaches to the solution of this difficult problem M. Louis Blane, one of its members, will be nominated President of the
Government Committee for Workers, and another of its members will be chosen as Vice-President—M. Albert, workman. Workmen will be called on to sit upon the Committee.
The meetings of the Committee will take place in the Palais du Luxembourg.
No doubt some of the men who signed this document only half believed that the experiment would be successful, and after its failure declared that they knew all along that it was hopeless. No one, however, who reads the records of the Revolution of 1848, and notes how greatly charged the air was with Socialism, can doubt that the Government as a whole were genuinely determined to give the Socialistic principle a fair trial, and that many of them, and especially those charged with the conduct of the workshops, at whose head was Louis Blanc, a convinced Socialist, entertained the highest hopes of success. Even Lamartine, who in 1844 wrote that the best governments were those that did not interfere with liberty of action in industrial affairs, signed the Decree, and for the time plunged deep into Collectivism. That the experiment was
fairly made, and that there was no determination, conscious or unconscious, to show that the national workshops were a piece of Utopia, is clear from the account of the undertaking written by M. Émile Thomas, their director and president, and published only a month or two after the collapse. M. Émile Thomas was a practical man of business, who was entrusted with the superintendence of the work by the Government. Though not a Socialist by conviction, it is clear that he did everything in his power to ‘run’ the workshops successfully, and that if any one could have organized them into efficiency it was he. That, at any rate, is the impression which I believe will be produced upon any one who reads the
Histoire des Ateliers Nationaux considérés sous le double point de vue politique et social; des causes de leur formation et de leur existence; et de l’influence qu’ils ont exercée sur les événements des quatres premiers mois de la Republique suivi des pièces justificatives. Par Émile Thomas. Paris: Michel Levy Frères, 1848. The proof that Thomas did his best for the workshops is to be found in the fact that Louis Blanc, armed with virtually absolute powers, superintended the undertaking, and could, if he had thought the work was being mismanaged, have dismissed Thomas. Perhaps, however, the best way of showing the bona fide character of the experiment is to describe the actual organization of the workshops and to note what they accomplished. In doing so I shall adopt, with some slight alterations, dictated by the desire to economize space, the account given by Mr. Nassau Senior in an essay in the
Edinburgh Review, since republished by his daughter, Mrs. Simpson (‘Journals kept in France and Italy:’ H. S. King and Co., 1871). It must be remembered that Senior visited Paris directly after the Revolution, that he was on terms of intimacy with many of the men who were responsible for the
Ateliers Nationaux, and that he had talked with those who had seen the workshops in full swing. In a word, he is a firsthand authority on a subject in which he took a profound interest. The actual details of his account are drawn directly from Thomas’s book, which is primarily a reprint of the official documents.
Before, however, summarizing Senior’s account of the workshops I will give the Decrees formulating the
droit au travail and establishing the
Here is the Decree which stated the right to work, or more scientifically—the right to wages (
le droit au salaire):—
February 25, 1848.
The Provisional Government of the French Republic binds itself to guarantee the existence of the workman by means of work;
It binds itself to guarantee work to every citizen;
It recognizes the right of the workmen to unite, to enjoy the fruits of their toil.
The Provisional Government gives back the million which will fall in from the civil list to the workmen to whom it belongs.
Here is the Decree under which the
Ateliers Nationaux were actually established:—
February 26, 1848.
The Provisional Government of the Republic decrees the immediate establishment of national workshops. The minister of public works is charged with the execution of the present Decree.
The effect of this Decree was the immediate opening of national workshops. Their organization was as follows. I adopt Senior’s abstract of Thomas’s account.
A person who wished to take advantage of the offers of the Government took from the person with whom he lodged a certificate that he was an inhabitant of the Département de la Seine. This certificate he carried to the
mairie of his
arrondissement, and obtained an order of admission to an
atelier. If he was received and employed there, he obtained an order on his
mairie for forty sous. If he was not received, after having applied at all of them, and found them all full, he received an order for thirty sous. Thirty sous is not high
pay; but it was to be had for doing nothing, and hopes of advancement were held out. Every body of eleven persons formed an
escouade; and their head, the
escouadier, elected by his companions, got half a franc a day extra. Five
escouades formed a brigade; and the brigadier, also elected by his subordinates, received three francs a day. Above these again were the lieutenants, the
chefs de compagnie, the
chefs de service, and the
chefs d’arrondissement, appointed by the Government, and receiving progressively higher salaries. Besides this, bread was distributed to their families in proportion to the number of children. ‘The hours supposed to be employed in labour were,’ adds Senior, ‘nine and a half. We say supposed to be employed, because all eleemosynary employment, all relief work, all parish work, to use expressions which have become classical in Ireland and England, is in fact nominal.’ M. Émile Thomas tells us that in one
mairie, that containing the Faubourg St. Antoine, a mere supplemental bureau enrolled, from March 12 to March 20, more than 1,000 new applicants every day. On May 19, 87,942 had altogether been enrolled, and a month later, 125,000—representing, at four to a family, 600,000 persons—more than one half of the population of Paris.
Such are the facts of the organization. I have no desire to moralize as to the abstract futility of these arrangements. I merely desire to call attention to the actual results of M. Louis Blanc’s experiment, under the nineteenth and thirtieth Decrees. The first witness I will call is the Correspondent of the
Economist newspaper, who was in Paris in 1848, and saw with his own eyes what he describes:—
The greatest experiment made by Louis Blanc was the organization of tailors in the Hôtel Clichy, which, for the purpose, was converted from a debtors’ gaol into a great national tailors’ shop. This experiment began with peculiar advantages. The Government made the buildings suitable for the purpose without rent or charge; furnished the capital, without interest, necessary to put it into immediate and full operation; and gave an order, to commence with, for
twenty-five thousand suits for the National Guard, to be
followed by more for the Garde Mobile, and then for the regular troops. The first step taken was to ascertain at what cost for workmanship the large tailors of Paris, who ordinarily employed the bulk of the workmen, and performed Government contracts, would undertake the orders. Eleven francs for each dress was the contract price, including the profit of the master tailor, the remuneration for his workshop and tools, and for the interest of his capital. The Government agreed to give the organized tailors at the Hôtel Clichy the same price. Fifteen hundred men were quickly got together, with an establishment of foremen, clerks, and cutters-out. It was agreed that inasmuch as the establishment possessed no capital to pay the workmen while the order was in course of completion, the Government should advance every day, in anticipation of the ultimate payment, a sum equal to
two francs (1
d.) for each man in the establishment, as ‘subsistence money’; that when the contract was completed, the balance should be paid, and equally divided amongst the men. Such fair promises soon attracted a full shop; and when we visited the Hôtel Clichy, upwards of fifteen hundred men were at work, and apparently were not only steady, but industrious. The character of the work they were upon at the time, the urgency of the ragged Garde Mobile for their uniforms, formed an unusual incentive to exertion; the foreman told us that notwithstanding the law limiting the hours of labour to ten, the
‘glory, love, and fraternity’ principle was so strong that the tailors voluntarily worked twelve or thirteen hours a day, and the same even on Sundays: they seemed to forget the stimulus of the expected balance which each was to receive at the conclusion of the contract. What was the result? For some time many contradictory statements were put forward by the friends and opponents of the system. Louis Blanc looked upon it as the beginning of a new day for France. He had already arranged that as the tailors were the first to begin, the cabinet-makers should next be organized, and one by one all the trades of France. He forgot that he would not have an order for the cabinet-makers to furnish half the houses in Paris to begin with: this, in his estimation, was no difficulty. He had in view public warehouses for the sale of furniture; and although not a chair or table had been sold in the existing over-stocked shops for two months, he had no doubt about customers. But the result of the experiment in the Hôtel Clichy has been fatal. The first order was completed: each man looked for his share of the gain. The riches of Communism, and the participation in the profits, dazzled the views of the fifteen hundred tailors, who had been content to receive 1
d. per day as subsistence money for many weeks: no doubt every one in his own mind appropriated his share of the ‘
balance‘; for once he felt in his own person the combined pleasure of ‘master and man.’ The accounts were squared. Eleven francs per dress for so many dresses came to so much. The subsistence money at 1
d. a day had to be deducted. The balance was to be divided as profit. Alas! it was a balance of loss, not of gain; subsistence money had been paid equal to rather more, when it came to be calculated, than sixteen francs for each dress, in place of eleven, at which the master tailor would have made a profit, paid his rent, the interest of his capital, and good wages to his men, in place of a daily pittance for bare subsistence. The disappointment was great when no balance was to be divided. The consternation and disturbance was greater when a large loss was to be
discussed, for which no provision in the plans had been made. The customers—that is, the new National Guard and the Garde Mobile—were in a rage at the detention of their uniforms, and the whole attempt seems to have resulted in confusion and disappointment. Louis Blanc is not a match for the master tailors of Paris.—From
The Economist, May 20, 1848.
The next witness is Mr. Senior—for, as I have said, he was cognizant of the facts at first hand. He entirely corroborates the testimony of the Correspondent of the
Economist, and tells us, as above, that the work done in the
Ateliers Nationaux was purely nominal—an exact counterpart of ‘all Parish work’—i.e. the parish farms and parish houses of industry which Senior had seen at work, or rather at idleness and waste, during his inquiry into the English poor law. In addition, however, to noting Senior’s evidence in regard to the complete failure of the national workshops, I should like to quote the following very able reflections:—
When the relations of the labourer and the capitalist are in the state which in a highly civilized society may be called natural, since it is the form which in such a society they naturally tend to assume when undistorted by mischievous legislation, the diligence of the labourer is their necessary result. As he is paid only in proportion to his services, he strives to make those services as valuable as he can. His exertions perhaps ought more frequently to be moderated than to be stimulated. A large proportion of our best artisans wear themselves out prematurely. In another state of society, which is also natural in a lower civilization—that of slavery—a smaller but still a considerable amount of industry is enforced by punishment. But in eleemosynary employment there is absolutely no motive for the labourer to make any exertion, or for the employer, a mere public officer, to enforce it. The labourer is, at all events, to have subsistence for himself and his family. To give him more would immediately attract to the public paymaster all the labourers of the country; to give him less, and yet require his services, would be both cruelty and fraud. He cannot be discharged—he cannot be flogged—he cannot be put to task work—since to apportion the tasks to the various powers of individuals would require a degree of zealous and minute superintendence which no public officer ever gave. When the attempt was made in Paris, men accustomed to the work earned fifteen francs a day, those unaccustomed to it not one.
Another witness is Victor Hugo, who boldly asserted in the National Assembly that the experiment was a failure. ‘The national workshops,’ he declared, ‘have proved a fatal experiment. The wealthy idler we already know well; you have created a person a hundred times more dangerous both to himself and others, the pauper idler…. At this very moment
England sits smiling by the side of the abyss into which France is falling.’ The pauper idler is a happy phrase and well describes the condition of the unemployable—the men who pass their lives looking for work and praying God they won’t find it. Hardly less emphatic was the grave report of the Commission appointed by the French Government to inquire into the subject. While compelled to recommend the expenditure of further enormous sums of money, it felt bound to admit that ‘the Revolution, which found the workmen of Paris contracted in their proper sphere, has been, by treating them like spoilt children, the cause of that change in their character which makes every one now dread the excesses of which they may be guilty.’
The next witness to whom I would refer is M. Émile Thomas, the Director of the
Ateliers Nationaux, whose work I have named above. He shows how exceedingly difficult it is to do the thing which the Socialist assumes to be so easy, i.e. make people work, and how in spite of the most tremendous exertions to render the workshops a success, they broke down. His work, however, should be read, not merely quoted. He was a plain man of business, not a forger of epigrams, and he does not attempt to sum up the results of the experiment in any single passage. He tells the plain tale of what he saw and did quite plainly—a fact which makes the general drift of his history all the more impressive. His account of the workshops is the most convincing testimony possible that in 1848 Collectivist production had a fair trial and utterly broke down.
A word in conclusion as to what was the end of the national workshops. When the National Assembly found that the
Ateliers Nationaux were rapidly bringing the State to a condition of bankruptcy they determined to close them. This they did, with the result that the workmen rose in insurrection, and that for four days and nights there was such street fighting as the world had never seen before. In putting down the insurrection caused by the dissolution of the great Socialist experiment, 12,000 men were sacrificed—the number of killed at Waterloo was hardly greater.
Before leaving the subject of the Socialistic experiments tried in Paris, I will put on record for purposes of reference the following extract from Thiers’s
Rights of Property, which describes another experiment in Collectivism:—
The owner of a great engine factory lent for a time his works to his workmen, so that there was no capital sunk in the formation of an establishment, and he agreed to buy at a stated price the machines or parts of machines they might construct. This price has been augmented 17 per cent. on the average. The associated workmen were to govern themselves, to pay themselves, and to share the profits among them. The master had nothing to do with them. He paid for the machines, or portions of machines, and naturally he was not to pay until the work was done.
The associated workmen remained divided, as they were before, in different departments (a great facility of organization, since they had only to continue the habits they had acquired); they placed at the head of each department or workshop a president, and a general president over the whole. They preserved the former classification of wages (another facility arising from acquired habits), except that they gave three francs instead of two-and-a-half francs to the lower class, that of common labourers, and they discontinued paying the skilful workmen (the
marchandeurs, or middle-men) the high wages resulting from piece-work. These did not, like the rest, work all day; yet as they must be satisfied in a certain degree, they were accorded supplementary wages of ten, fifteen, and sometimes twenty sous, which, added to the four francs of average wages, gave five francs, at the most, to those workmen who had previously earned six, seven, or eight francs a day. These supplementary wages were given by the presidents of the workshops. After having thus raised the wages of the mere labourer, and lowered those of the clever workman, the following was the result of the three months’ trial.
There was a daily tumult in the workshop. ‘Tis true, tumult was pretty general then, and was not less at the Luxembourg, or the Hotel de Ville, than in the manufactories. The men made holiday whenever it pleased them to take part in this or that demonstration, which, however, only injured the workmen themselves, for the proprietor paid only for the work when done. But they did not work much when they were present, and the presidents charged with the maintenance of order and the supervision of the labour were changed two or three times a fortnight. The general president, having no local supervision in the workshops, was subject to fewer variations of favour, being changed once only during the period of the association. Had they worked as before, they would have received a sum of 367,000 francs in these three months; but their returns were only 197,000 francs, although their prices were raised 17 per cent. The principal cause of this smaller production was not owing solely to the fewer number of days and hours they attended the workshops than before, but because, when present, they did not work with such activity. The piece-hands, who only received at the utmost a trifling supplement of a franc, were not very zealous in labouring for the association. The men whom they generally took
with them when they were on piece, to whom they gave a small additional sum, and whom they superintended in person, were left to the almost negative supervision of the presidents of the workshops, and a thousand workmen out of fifteen hundred manifested that ardour with which men are animated when they do not work for themselves. In a word, 100 labourers received half-a-franc a day more; 300 or 400 workmen received their ordinary 300 or 400 francs, but during fewer days, for they took more holidays; and the 1,000 clever mechanics, who formerly worked by the piece, were deprived of the advantage due to their exertions, which had raised their daily wages to seven, eight, and ten francs. Accordingly, the good hands were all determined to leave the establishment, and when the three months assigned to the association had expired, it came to an end without a single protest. It was a kind of insolvency, for it owed many hours which had not been made up, and had swallowed up the little capital of a benefit fund instituted by the owner of the establishment previously to this philanthropic administration.
Ten sous more a day, to a hundred labourers out of 1,500; the wages of 300 or 400 more kept at the same point; those of 1,000 clever hands diminished; the whole body much poorer in consequence of absences, representing 32 per cent. of time lost; 197,000 francs of work, instead of 367,000 in the same period; all the good workmen disheartened; and finally, the association itself insolvent after three months’ existence, although there was an establishment already prepared by the owner—this was the result.
Compare in this context the Report of the Surveyor who in 1893 superintended Mr. Shaw Lefevre’s attempt to pull down a part of Millbank Prison by means of the unemployed. When these men worked with the knowledge that their pay would vary according to the work done, they did twice as much as when they knew that whether they worked or idled their pay would be 6½
d. an hour. While the cost of cleaning and stacking bricks by the unemployed, acting as the pensioners of the State, averaged from 128. to 138. a thousand, the same men when employed by piece managed to earn higher wages than before, although the rate agreed on was only 7
s. a thousand.
Perhaps it will be said that the national workshops failed because they were set up in France, and that Collectivism would do much better in England. That is a strange argument considering the natural aptitude for being ordered about officially possessed by our neighbours. Still I will try to meet it. We possessed till the Reform of the Poor Law a good many experiments in Socialism in the shape of Parish
Farms and Houses of Industry, where the poor were, in accordance with the Statute of Elizabeth, ‘set on work.’ These experiments have lately been examined in a very able and moderate article by Professor James Mavor (
Nineteenth Century, October, 1893). The conclusions he arrives at are that all the attempts were failures:—
The conclusions from this survey of attempts ‘to set the poor on work’ cannot be said to afford much substantial ground for optimism regarding the probability of success of modern attempts in the same direction. It is quite evident that the parish farm hitherto has not afforded a means of relief to the respectable artisan out of employment, but that it has been occupied solely by the vagrant and the beggar. It would seem to be a well-established fact that these two very distinct classes will not mix together in parish farms or anywhere else. The history of the parish farm shows that while it is costly and highly susceptible to the evils of bad management, it may be adapted to the needs of the beggar; but there is no evidence to show that the respectable artisan would be likely ever to enter it so long as the beggar is there.
Before I leave the subject of Collectivism tested by experiment, I desire to say a word on the general question, and for that purpose will resume some portion of what I have written elsewhere on the subject (i.e. in
The Liberal Unionist in 1891). I admit as fully as any Socialist can that the ideal is to get a better, fairer and more equal distribution of the world’s goods. Two solutions are offered of this problem—one by the Socialists, the other by those who follow in the footsteps of Mr. Cobden and Mr. Bright. The Socialists in effect say, ‘Make the State the universal proprietor and the universal employer of labour, and you will have solved the problem and produced a community where misery shall have ceased to exist.’ On the other hand, the advocates of Free Exchange, not less zealous nor less religious in their own faith, say, ‘Free trade and labour from all shackles, put an end to the ruin and waste of war, and of the armaments maintained for the purpose of war, stop all unnecessary absorption by the State of wealth which should belong to the individual, and you will make human labour so valuable that every man willing and able to work will be able to command material comfort.’ I have no hesitation in saying
that I believe the solution offered by the advocates of Free Exchange is the true solution. Socialism, which has existed as an aspiration since the world began, has in bygone times been carried into practice, but always with one result—the enslavement and misery of people. When the Spaniards tore down the veil behind which the Peruvian State had developed secluded from all intercourse with the outside world, they found a community arranged on the most approved Socialistic model. The State owned the land, the flocks and herds, the houses, and finally, the bodies of the inhabitants. What was the result? The Peruvians were a nation of slaves, living a life which was little better than that of well-kept, well-fed animals. Again in Paraguay the Jesuits produced a Socialistic state. The
infantes barbati, or bearded children of their Reductions—the name given to the communities in which the Indians were collected—were ideal Socialist citizens. They possessed no property. No family was richer or more esteemed than another, and all individual effort was suppressed. Yet who will venture to assert that Paraguay under the Jesuits is a model which ought to be copied in the regulation of human society? The case against Socialism is, indeed, conclusive in every particular. Socialism can be proved unsound both economically and historically; and, further, it can be shown to be in conflict with the strongest impulses and instincts of human nature. It may be said, perhaps, that if Socialism can be shown to have failed it cannot be shown that any system based on Free Exchange has ever succeeded. No doubt no State has yet been civilized enough to adopt the principle of Free Exchange in its entirety. It can, however, be proved that those States which have approached most nearly to that ideal are the most prosperous, and their inhabitants least miserable. England has gone further than any other country in the direction of Free Exchange, and unquestionably the people of England are better off than those of any country whose conditions as to debt and geographical position make the comparison a fair one. Wages are better, prices lower, and the standard of comfort higher in England than in any
country of the Continent. That this is due to the partial adoption of the principle of Free Exchange, I do not doubt for a moment.
I will end by giving what I believe to be the plain reasons why plain men should not be Socialists. It is not because Socialists are innovators or agitators or preach things contrary to the Book of Daniel, or are this, that, or the other, but simply and solely because Socialism is nonsense. Let me try then to put my reasons for not being a Socialist in the simplest possible form—the form which is patronizingly called suitable for children and uneducated persons, but which in reality is the form in which everyone reasons out a subject in his own mind.
Should those who desire, above all things, an improvement in the condition of the labourer become Socialists?
Because Socialism, if carried out, would injure, instead of benefiting, the labourer.
Why would Socialism injure the labourer?
For the following reason: If the condition of the working men is to be improved, that is, if they are to have more food, more room in their houses, more clothes, more firing, more of everything they desire, it is evident that there must be more of all these things in the world. That is, there must be more wealth, for these things make up wealth. But in order that there shall be more wealth, i. e. more of the things men need and desire, more must be produced. If ten men have only five loaves between them, and need one each, the only way they can be made comfortable is by getting five more. It follows, therefore, that nothing which decreases the total wealth of the world, which diminishes, that is, the corn grown, the wool clipped, the houses built, the cotton spun, or the coal dug, can improve the condition of the poor. If, then, Socialism would diminish the production of the things needed by mankind it would be injurious.
But would it diminish the wealth of the world, and so makes less to go round?
In this way. The great stimulus to the production of wealth of all kinds is self-interest. American farmers who increase the wheat supply of the world, by working hard throughout the year, do not do so out of love for their fellows, but because they want to get rich, and be able to spend money in the manner most pleasing to themselves. In the same way the man who throws up a life of comfort, and works from morn to night till he has made a discovery which will enable the manufacturer to turn out double the amount of woollen cloth without increased expenditure, does so because he has the incentive of self-interest before his eyes—the incentive of knowing that success will be rewarded by the fulfilment of his desires. Throughout the world the motive force of the machinery which produces wealth is self-interest—not self-interest in a bad sense, but the natural and legitimate desire for reward and enjoyment. Destroy this motive force, give men no rewards to strive for, and each individual, unless compelled, will do no more than is necessary to keep himself and his family from starvation. But this is exactly what the Socialist intends to do. He proposes to take away the incentive, under the influence of which more and more wealth is added to the world’s store, and to deprive men of the rewards in order to obtain which they now labour. The Socialist would confiscate all private property, and dole out to each individual a subsistence portion. But in order that there shall be something to dole out the inhabitants of the Socialistic state will be compelled to work. Compulsion in a word will become the ultimate motive force of the machinery of production under Socialism, just as under our present system it is self-interest. Which is likely to be the most successful? Who works best, the slave or the labourer, at weekly wages who, if he finds his work irksome, can at least gratify his own tastes in his own way? All experience shows that compulsion produces less than pay.
Convict labour is a synonym for waste and inefficiency. Socialism, then, based as it must be on compulsion, would diminish the wealth of the world. But if the total wealth of the world is diminished there will be less to go round, and, therefore, the share of each person will be less. That is, Socialism would injure instead of benefiting the poor.