# The Case for Capitalism/Chapter 8

Any one who wants a detailed picture of the manner in which the State might obtain control of the means of production and organize industry to the exclusion of the private capitalist, can find it in a book called The Ragged-Trousered Philanthropist, by Robert Tressall, published in April 1914 by Grant Richards. It is a tragic and very interesting book, and is said to have been written by a Socialistic house-painter, who died soon after writing it. It describes the experiences of an educated working man, with high ideals of work and life, employed by a very third-rate firm of builders and decorators among a crowd of jeering and illiterate companions, whom he tried to stimulate to accept his own views on Socialism, as being the only remedy for the evils under which he and they suffered. In the last chapter this idealist, finding himself threatened with deadly disease, decides that the ​kindest thing to do for his wife and son is to take them with him out of a world which seems to him hopeless. It is a terrible book, and as a picture of the black side of the present economic arrangements of society, is well worth study.
The most interesting pages in it—apart from the roughly humorous descriptions of the gaiety with which these unfortunate, underpaid, and overdriven workers face the misery of their lot—are those in which the idealist worker, Frank Owen, describes to his companions, in answer to their jeering questions, the means by which their lot could be bettered. In the course of one of these orations he gives a detailed and ingenious description of the birth of the Socialistic State (page 334). He begins by dealing with the land, saying that a large part of it may be got back "in the same way as it was taken from us. The ancestors of the present holders obtained possession of it by simply passing Acts of Enclosure; the nation should regain possession of those lands by passing Acts of Resumption." As to the rest of the land, he suggested that the present holders should be allowed to keep it during their lives and that it should then revert to the State "to be used for the benefit of all." The railways, ​of course, would be nationalized at once. All railway servants, managers and officials would continue their work, being henceforward in the employ of the State. The State would pay to shareholders the average dividends they had received during the previous three years, these payments being continued to the present shareholders for life, or for a stated number of years, and the shares would be made non-transferable.
As for the factories, shops, and other means of production and distribution, the State would "adopt the same method of doing business as the present owners." The speaker argues that even as the big Trusts and Companies are crushing by competition the individual workers and small traders, so the State should crush the Trusts by competition. "It is surely justifiable for the State to do for the benefit of the whole people that which the capitalists are already doing for the profit of a few shareholders." The first step would be the establishment of retail stores for the purpose of supplying all national and municipal employees with the necessaries of life at the lowest possible prices. The Government would buy these goods from private manufacturers in such large quantities that it would be able to get them at the very cheapest rate, and as there would be no high ​rents to pay for showy shops, and no advertising expenses, and as the Government would not be aiming at profit, it would be able to sell much cheaper than the profit-making private stores. These National Service Retail Stores would only serve those in the public service; and coined money would not be taken by them in payment for the things sold. At first all public servants would continue to be paid in metal money, but those who wished it would be paid all or part of their wages in paper money, which would be taken in payment for their purchases at the National Stores, National Hotels, National Restaurants, and other places which would be established for the convenience of those in the State service. Owing to the cheapness of the articles that it would command, the paper money would win increasing favour, and all public servants would soon prefer to have all their wages paid in it. The Government, however, would still need metal money to pay the manufacturers who supplied the goods sold in the National Stores. But to avoid buying all these things from them the State would then begin to produce for itself.
​Public lands would be cultivated, and public factories would be started to produce food, boots, clothing, furniture and all other necessaries and comforts of life. All who were out of employment and willing to work would be given work on these farms and in these factories, which would be "equipped with the most up-to-date and efficient labour-saving machinery." How the State is going to get the machinery is not made clear. Perhaps it could provide the necessary money by taxation, if by that time there were any one left to tax, or perhaps it would just take it. From its farms and factories so equipped it would pour out a great flood of cheap goods, and all public servants would revel in "abundance of everything." When the workers who were being "exploited and sweated" by the private capitalists saw what was happening, they would come and ask to be allowed to work for the State. "That will mean that the State army of production workers will be continually increasing in numbers. More State factories will be built, more land will be put into cultivation. Men will be given employment making bricks, woodwork, paints, glass, wall-papers and all kinds of building materials; and others will be set to work building, on State land, beautiful ​houses, which will be let to those employed in the service of the State. The rent will be paid with paper money."
State fishing-fleets would be the next State enterprise, and in order to deal with the "great and continuously increasing surplus stock" in its hands, the Government would acquire or build fleets of steam trading-vessels, manned and officered by State employees, to carry the surplus stocks to foreign countries, to be sold or exchanged for foreign products, which would be brought to England and sold at the National Service Stores, at the lowest possible price, for paper money, to those in the service of the State. A detachment of the Industrial Army would be employed as actors, artists and musicians, singers and entertainers. Everyone that could be spared from producing necessaries would be set to work to create pleasure, culture and education.
Meanwhile, private employers and capitalists would find that no one would come and work for them "to be driven and bullied and sweated for a miserable trifle of metal money," and some might threaten to leave the country and take their capital with them. "As most of these persons are too lazy to work, and as we shall not need their money, we shall be very ​glad to see them go." But their real capital, their factories, farms, mines or machinery, would be a different matter. So a law would be passed, declaring that all land not cultivated by the owner or any factory shut down for more than a specified time, would be taken possession of by the State and worked for the benefit of the community. Fair compensation would be paid in paper money to the former owners, who would be granted an income or pension either for life or for a stated period. Wholesale and retail dealers would be forced to close down their shops and warehouses, first, because they would not be able to replenish their stocks, and secondly because even if they were they would not be able to sell them. This would throw out of work a great host of people "at present engaged in useless occupations, such as managers and assistants in shops of which there are now half a dozen of the same sort in a single street, and the thousands of men and women who are slaving away their lives producing advertisements. These people are in most cases working for such a miserable pittance of metal money that they are unable to procure sufficient of the necessaries of life to secure them from starvation." (Here the writer surely overstates his case.) But all ​those who are willing to work would be at once employed by the State in producing or distributing the necessaries and comforts of life. The Government would build houses for the families of all those in its employment, and all other house property of all kinds would rapidly fall in value. "The slums and the wretched dwellings now occupied by the working-classes, the miserable, uncomfortable, jerry-built 'villas' occupied by the lower middle-classes and by 'business' people, will be left empty and valueless upon the hands of their rack-renting landlords, who will very soon voluntarily offer to hand them, and the ground they stand upon, to the State on those terms accorded to the other property owners, namely, in return for a pension."
By this time the nation would be the only employer, and as no one would be able to get the necessaries of life without paper money, and as the only way to get it would be by working, every mentally and physically capable person in the community would be helping in the great work of production and distribution. There would be no unemployed and no overlapping. For every one labour-saving machine in use to-day, the State would, if necessary, employ a thousand, and there would be produced ​such a "stupendous, enormous, prodigious, overwhelming abundance of everything," that soon it would be necessary to reduce the hours of the workers to four or five hours aday. All young people would remain at the schools and universities until they were twenty-one years of age. At forty-five every one would retire on full pay. "Thus, for the first time in the history of humanity, the benefits and pleasures conferred upon mankind by science and civilization will be enjoyed equally by all, upon the one condition, that they shall do their share of the work in order to make all these things possible. These are the principles upon which the Co-operative Commonwealth will be organized; the State in which no one will be distinguished or honoured above his fellows except for Virtue or Talent; where no man will find his profit in another's loss, and we shall no longer be masters and servants, but brothers, free men, and friends; where there will be no weary broken men and women passing their joyless lives in toil and want, and no little children crying because they are hungry or cold."
I have given this detailed summary largely in Mr. Tressall's own words, because it is the only picture of a Socialistic State that I know ​which works out in detail how it came into being. William Morris' beautiful dream in News from Nowhere shows us life under Socialism but does not tell us how it came about, or even how the material needs of the Socialistic community were met. Mr. Tressall's scheme, though it bristles with obvious diffculties and involves some injustices, is not altogether impracticable and, while the mere suggestion of paper money in connection with a Socialistic Government makes one shudder in the light of recent experiences, there is nothing necessarily unsound in his paper money as long as its authors did not make too much of it.
Most of us will admit that the picture is in many ways highly attractive, and that if the writer's ideals could be secured by the methods that he proposes it would be worth while to sacrifice a good deal, in order to obtain them. But some very large assumptions are involved by his exposition. In the first place, he gives to the State officials a power of organization which is at present more notable as an effort of idealist imagination than likely to be realized in the world of fact; and it also assumes efficiency and alacrity on the part of those who work for the State concerning which one can only feel a certain amount of scepticism.
​If it involves certain injustices, Mr. Tressall's scheme also carries with it, if it could be carried out, very great benefits to a very large proportion of the population. But there remains still the question whether, if we could swallow all the injustices and all the assumptions in return for all the promised benefits, the result achieved would be one in which anything like economic freedom would be secured, and in which the nation as a whole would be better off in every sense of the word.
On this subject, as has already been observed, the most outspoken critics of State Socialism are the exponents of the new variety of Socialism known as Guild Socialism. Mr. Cole, who has already been quoted in former chapters, says on page 5 of his book on Self-Government in Industry that "Before the war the problem of industrial control had forced its way to the front. State Socialism, in part a bureaucratic and Prussianizing movement and in part a reaction against the distribution of wealth in capitalist society, continued to develop, at least in its Prussian aspects. But, from the working-class point of view, State Socialism was intellectually bankrupt. The vast system of regimentation inaugurated by the Insurance Act was opening men's eyes ​to the dangers of State control, and, in those services, such as the post office, which were already publicly administered, discontent was growing because the State and municipal employees found that they were no less wage slaves than the employees of private profiteers." And on page 114: "The crying need of our days is the need for freedom. Machinery and Capitalism between them have made the worker a mere serf, with no interest in the product of his own labour beyond the inadequate wage which he secures by it. The Collectivist State would only make his position better by securing him a better wage, even if we assume that Collectivism can ever acquire the driving-power to put its ideas into practice: in other respects it would leave the weaker—[presumably a misprint for "worker"] essentially as he is now—a wage slave, subject to the will of a master imposed on him from without. However democratically-minded Parliament might be, it would none the less remain, for the worker in any industry, a purely external force, imposing its commands from outside and from above. The postal workers are no more free while the post office is managed by a State department than Trade Unionists would be free if their Executive Committees ​were appointed by His Majesty's Minister of Labour."
Equally emphatic is a book called National Guilds: an Enquiry into the Wage System and the Way Out, which is described on its cover as by A. R. Orage, and on its title-page as by S. G. Hobson, edited by A. R. Orage. On page 21, the Hobson-Orage partnership observes that "there is this in common between Municipal and State Socialism: both are equally committed to the exploitation of labour by means of the wage system, to the aggrandisement of the municipal investor. State Socialism is State capitalism, with the private capitalist better protected than when he was dependent upon voluntary effort."
Later on, on page 153, they say that they "have shown that the continuance of the wage system is inevitable if the State Socialist prevails, since he can only acquire productive and distributive undertakings by payment of a compensation that would bear as heavily upon labour as the present burden of rent, interest, and profits." And the champion of Guild Socialism who has published the latest book on the subject, Mr. G. R. Stirling Taylor, deals roughly with the question of bureaucratic efficiency.
​"Bureaucracy," he says, "as a matter of fact, does not choose expert workers; it chooses first-class bureaucrats. It would be inhuman if it did not look upon the world with the rather timid eyes of the sedentary clerk. It probably thinks that the world can be saved if a sufficient number of letters and reports are written about it. There are hundreds and thousands of clever, self-sacrificing officials in Government offices, who pass their lives in helpful work. But the most helpful work they can do is to stand on one side, and not act as a—buffer between the men who are themselves producing and the community which is receiving. It is not that all Government officials are dishonest or foolish; most of them are the reverse. The bad thing about them all is that they are clerks, and wealth is not made by clerks."
Thus all the attractions, such as they are, of State Socialism for those who see how black are the effects of the present system, are dismissed as a fraudulent and futile chimera by the advocates of the latest form of Socialistic zeal, namely the National Guilds. In the meantime the Capitalist may chuckle as he sees the Socialism that was the bogey of his ​childhood derided by Socialists of the latest brand, and wonder when a new vintage, equally contemptuous of the Guildsmen, will come into fashion.
The schemes which these ingenious gentlemen put forward for the bettering of our lot will be examined in later chapters. In the meantime their criticisms of State Socialism are by no means necessarily decisive. Labour leaders seem to be in favour of nationalizing everything, though it is by no means clear that thereby they voice the real opinions of those whom they are alleged to represent. They seem to think that somehow nationalization can be adopted without involving the bureaucratic control which they emphatically flout. Mr. Brace in the House of Commons, Nov. 28, 1919, said, "The mining people are driven to despair at this blunder in connection with the Coal Controller's department. . . . This is not how nationalization would work. If it were I would oppose it. This is bureaucratic control pure and simple, and it is the worst of all systems. Better far go back to private ownership and private control." But he did not explain how nationalization could be accomplished and bureaucratic control avoided. Whatever attempts are made to dodge it by ​means of committees and district councils, nationalization must surely mean that the nation puts money into an industry, and so Treasury control becomes inevitable, with all its consequences.
A state of society in which everybody worked and nobody was overpaid and nobody was underpaid, and everybody enjoyed a fair share of an overwhelming abundance of the good things of life has certainly enormous advantages to recommend it, if it can be attained, as compared with our present system. Nevertheless, even this is only to be secured, according to its advocates, by the introduction of a system which might carry with it very deadening drawbacks. Mr. Cole deals a deadly blow at State Socialism when he speaks of the "regimentation" involved by it, and describes it as a Prussianizing movement. In order to obtain the very great economy in production, which is certainly possible if a really efficient State administration took the business in hand, decided what was good for the community to consume, and then set the whole energies of the nation on to producing those particular articles, it would be necessary to lose the freedom of choice in production and consumption which our present system gives us, involving ​some waste, but at the same time conferring certain benefits which are rightly very dear to the great majority of mankind, and will continue to be so.
To most of us, to find ourselves members of a monstrous organization which regulated our lives from our birth to our death, telling us what work we are to do, what necessaries of life we are to consume, and what pleasures we are to enjoy, would seem to be a fate under which, though we might get a much larger supply of some of the good things of life than we now enjoy, we should only do so through the sacrifice of all the freedom and fumbling and failure which make life worth living because they are our own fault and make men and women of us by testing us and battering us with our own blunders and teaching us to take risks. It might be cheaper to have national retail stores at which we all had to shop, instead of half a dozen shops in the same street competing for our custom, but should we be so well served, and should we have the same variety of choice, and should we not suffer very considerable inconvenience by having our wants supplied by people who had no incentive of private gain to spur them to do the best that they can for their customers? ​As human nature is at present, it seems most probable that our dealings with the great Government stores might often be very uncomfortable, disagreeable and unsatisfying. It has long been a commonplace that the difference of spirit in which one is served at a post office and at a private shop which depends on its customers' goodwill for its profits is markedly in favour of the latter. And a very interesting confirmation of the incentive of profit in rendering services to the consumer has been provided during the late war, when, owing to restrictions on the supply of goods and the absence of competition, shopkeepers no longer had the same need to observe ordinary courtesy towards their customers. It is often assumed by Socialistic enthusiasts that when once profit-making and competition are eliminated every one will be sunny and kindly and helpful. How far this theory is from fact was made clear to any one who during the war wanted to buy a pound of sugar or a box of matches or anything in which profit was automatic and competition was suspended.
But even if this were not so, if we not only had abundance, which is doubtful, but also pleasant and kindly relations between producer ​and consumer, which is problematical, would it make up for the loss of the old freedom to make mistakes in our own way and so attain to that development which is only possible to those who have a chance of doing and being wrong? To quote Mr. Stirling Taylor again: "Doing the wrong thing ourselves is often more stimulating than doing the right thing because somebody else orders it." To have all the pitfalls of life filled in and fenced off by bureaucratic efficiency would make it a very comfortable proceeding perhaps, but as exhilarating and stimulating as a journey through a tunnel in a Pullman car. If it were the only possible cure for destitution, then perhaps nine-tenths of us might submit to it, with resignation, in the interests of the now unfortunate tenth. But is there no other way of solving this terrible problem but by living in a society which at best would be a glorified and well-appointed workhouse? If there is any other way, surely those who believe that a sound and good people can only be made out of sound and good individuals, and that no individuals can learn to be sound and good except by facing life's problems for themselves, are entitled, and bound, to resist the regimentation and tyranny involved ​by State Socialism. Under it the individual would have as much chance of development and progress as a fowl in an intensive poultry farm, and would probably be not nearly as well fed as they are.
* ↑ At the time when Mr. Tressall's book was written, we had a gold currency in England.
* ↑ The Guild State, page 59.