§6. Let us now turn to consider how far the action of government should be directed to the end which would be commonly called ``socialistic'' in a narrower sense than that in which I have so far used the term,---the diminution of the marked inequalities in income which form so striking a feature of modern civilised societies. Here, first, it should be observed that some effect of this kind tends to be produced by any successful assumption of industrial functions by Government: since the most marked inequalities of private wealth are due---directly or indirectly---to the unequal distribution of capital (including land); and any successful extension of the industrial functions of Government tends to increase the stock of capital owned by the community, and reduce the field of employment for private capital. Accordingly, a main aim of current Socialism in its extremest form---we may distinguish it as Collectivism---is to substitute common for private ownership, and governmental for private management, of the instruments of production in all important departments of industry: so that the payment of interest on industrial capital may cease and ``labour receive its full reward''. Such a scheme has much attraction for thoughtful and sympathetic persons; not only from its tendency to equalise wealth, but also from the possibilities it holds out of saving the waste and avoiding the unmerited hardships incident to the present competitive organisation of business; and of substituting industrial peace, mutual service, and a general diffusion of public spirit, for the present conflict of classes and selfish struggles of individuals.
In discussing this scheme from the point of view of general theory, it will be well not to complicate the issue by supposing the change to be introduced suddenly or with violence: we may suppose it to take place gradually, with due regard to the rights of existing proprietors of the instruments of production. As so considered, the question of its expediency primarily turns on a comparison of governmental management of business with private competitive management: and it is reasonable to suppose further that, before the final transition to Collectivism takes place, our experience of the qualifications of Government for carrying on different kinds of industry will have been materially it increased by partial extensions of its sphere of action. It is, I think, quite conceivable that, through improvements in the organisation and working of governmental departments, aided by watchful and intelligent public criticism---together with a rise in the general level of public spirit throughout society---the results of the comparison above mentioned will at some future time be more favourable to governmental management than they have hitherto been. At present, a wide experience would seem in most cases to support strongly the judgment of the overwhelming majority of political economists in favour of private competitive management of industry carried on under ordinary conditions: as securing an intensity of energy and vigilance, an eager inventiveness in turning new knowledge and new opportunities to account, a freedom and flexibility in adapting industrial methods to new needs and conditions, a salutary continual expurgation of indolence and unthrift, which public management cannot be expected to rival in the present state of social morality, and for the loss of which it cannot compensate, except under specially favourable conditions. We may therefore infer that---leaving out of account the disturbances of the transition---the realisation of the Collectivist idea at the present time or in the proximate future would arrest industrial progress; and that the comparative equality in incomes which it would bring about would be an equality in poverty:---even supposing population not to increase at a greater rate than at present, as it must be expected to do if work and adequate sustenance were secured to all members of the community, unless measures of a novel and startling kind were taken to prevent the increase.
A full discussion, however, of Collectivism, including a critical exposition of the economic arguments urged in favour of it, would be out of place here: it falls more properly within the sphere of Political Economy. But there is an important part of the work actually undertaken by modern governments which must be admitted to be ``socialistic'' in the narrower sense of the word: that is, which has for its main object---I will not say ``the equalisation of wealth'', as that would suggest an aim to which the means used are wholly disproportionate, but---the mitigation of the harshest inequalities in the present distribution of incomes. The most obvious examples of this are to be found in the large expenditure incurred in various forms for the relief of the indigent; but I conceive that a part at least of the expenditure on education which modern states generally agree to regard as desirable has been undertaken on this ground, and requires this for its justification. And there is a strong drift of opinion at the present time in favour of further legislation in this direction. I propose, therefore,---without considering in detail the adaptation of means to ends in particular measures of this kind, or the special dangers and drawbacks attending them---to point out certain general considerations which must to some extent govern our estimate of the expediency of all such schemes.
In the first place, it seems to me indubitable that the attainment of greater equality in the distribution of the means and opportunities of enjoyment is in itself a desirable thing, if only it can be attained without any material sacrifice of the advantages of freedom. I cannot accept the assumption---so far granted for the sake of simplifying the discussion---that the utility to the community of services rendered to the rich may be measured by their market value: I conceive, on the contrary, that the support of common sense may be claimed for Bentham's view, that any given quantum of wealth is likely to be less useful to its owner, the greater the total of private wealth of which it forms a part. It is an accepted economic principle---illustrated by the general effect of an increase of supply on the price of any article---that the utility of a given quantum of any particular commodity to its possessor tends to be diminished, in proportion as the total amount of the commodity in his possession is increased; and Bentham's proposition is merely an extension of this principle to the aggregate of commodities which we call wealth.
There are, no doubt, counterbalancing considerations which ought not to be overlooked. Any great equalisation of wealth would probably diminish the accumulation of capital, on which the progress of industry depends; and would deteriorate the administration of the capital accumulated; since the most economic organisation of industry, under existing conditions, requires capital in large masses under single management, and the management of borrowed or joint-stock capital is likely to be, on the average, inferior to that of capital owned by the manager. Moreover, the effective maintenance and progress of intellectual culture---which is a necessary condition of its effective diffusion---seems to require the existence of a numerous group of persons enjoying complete leisure and the means of ample expenditure; since the disinterested curiosity that is the mainspring of the advance of knowledge, and the refinement of taste that leads to the development of art, can hardly find free play and the fostering influence of sympathy except within such a group, although they may be found in a high degree in individuals outside it.
Still, after allowing all weight to such arguments as these, I cannot doubt that at least a removal of the extreme inequalities, found in the present distribution of wealth and leisure, would be desirable, if it could be brought about without any material repression of the free development of individual energy and enterprise, which the individualistic system aims at securing. When from this point of view we examine the various legislative measures which have a ``Socialistic'' aspect---in the narrower sense of appearing to aim at a diminution of inequalities of wealth---we find that they differ very markedly in the manner and degree in which they come into conflict with the principle of Individualism. Some of these measures must be admitted to diminish the inducements to industry and thrift, without any counterbalancing tendency to stimulate labour by enlarging its opportunities; they simply and nakedly take the produce of those who have laboured successfully to supply the needs of those who have laboured unsuccessfully or not at all. I am afraid that the English system of poor relief---though it has many merits that ought not to be undervalued or lightly lost---must be admitted to have this fundamental defect. Others again involve restrictions on freedom that are frankly and uncompromisingly anti-individualistic; to this class belongs the proposal to fix by law a maximum length of day's labour for adults---so far as this prevents any individual labourer from rendering the amount of service to society which he and his employer agree in thinking it their common interest that he should render. But there are other measures designed for the benefit of the poor which do not come under either of these heads; measures of which the primary aim is not to redistribute compulsorily the produce of labour, but to equalise the opportunities of obtaining wealth by productive labour, without any restriction on the freedom of adults. State aid to emigration is an example of this class, and a part at least of the expenditure on education must be held to belong to it. Now measures of this kind, however Socialistic, are not in their primary aim opposed to Individualism; since we obviously increase instead of diminishing the stimulus to self-help and energetic enterprise by placing a man in a position to gain more than he could otherwise have done by the exercise of these qualities. In fact, in the general reasoning by which political economists have tried to prove that laisser faire supplies the greatest possible stimulus to the development of useful qualities, equality of opportunity has often been tacitly assumed---or at least, the loss to the community arising from the restricted opportunities of large masses has been tacitly overlooked. So far as the community, acting through its government, can equalise opportunities, without doing harm in any other way, such interference actually gives greater scope for the admitted advantages of the individualistic system to be attained.
``But'', it may be said, ``this equalisation of opportunities---as e.g. by State aid to education or to emigration---inevitably costs money and usually a good deal of money, which has to be raised by taxation; and thus in its taxational aspect it comes to be opposed to the individualistic principle, though it may not be so in its primary aim. A portion of A's income has to be taken to enable B to labour under better conditions, and in this way that absolute security to the fruits of the individual's labour, at which individualism aims, is inevitably impaired.''
This argument, however, ignores the fact---pointed out in a previous chapter---that the institution of private property as actually existing goes beyond what the individualistic theory justifies. Its general aim is to appropriate the results of labour to the labourer, but in realising this aim it has inevitably appropriated natural resources to an extent which, in any fully peopled country, has entirely discarded Locke's condition of ``leaving enough and as good for others''. In any such country, therefore, the propertied classes are in the position of encroaching on the opportunities of the unpropertied in a manner which---however defensible as the only practicable method of securing the results of labour---yet renders a demand for compensation justifiable from the most strictly individualistic point of view. It would seem that such compensation may fitly be given by well-directed outlay, tending either to increase the efficiency and mobility of labour, or to bring within the reach of all members of a civilised society some share of the culture which we agree in regarding as the most valuable result of civilisation: and in so far as this is done without such heavy taxation as materially diminishes the stimulus to industry and thrift of the persons taxed, this expenditure of public money, however justly it may be called Socialistic, appears to be none the less defensible as the best method of approximating to the ideal of Individualistic justice.[Back to:] [Elempol, Chapter 10, Section 5]